Wednesday, March 18, 2009

BBC Worldwide Refocusses

In July 2008, the BBC Trust launched a review of BBC Worldwide's mandate, strategy and governance arrangements. The aim was twofold: to see if any changes were needed to reflect experience since the present arrangements were established in the current BBC Charter; and to consider concerns expressed by others in the market about the impact of BBC Worldwide.

The BBC Trust says....

Successive governments have encouraged the BBC to exploit the commercial value of its intellectual property and to return this value to public service output. The Trust fully supports this aim, and alongside the primacy of the public services welcomes BBC Worldwide's record of increasing profitability and the benefits it brings to licence fee payers.

Our review has been driven by two concerns. The first is to ensure that BBC Worldwide's strategy is properly aligned with the BBC's public service interest and so has a positive impact on the BBC's brand and reputation. The second is to ensure that in its strategy and operations BBC Worldwide is duly sensitive to the concerns of other commercial players in the market.

Our emerging thinking can be summarised as follows:

* The Trust should bring greater clarity to the direction, parameters and strategic priorities of BBC Worldwide's commercial activities in the UK and overseas, to ensure that they align properly with delivery of the BBC's public purposes
* We should make changes to BBC Worldwide's detailed control framework to establish a more contained focus for its operations
* None of this cuts across our ambition that BBC Worldwide should maintain and develop its commercial vigour and strength. In our view this is perfectly compatible with a challenging remit and clearer parameters for its operation and strategic focus

Other considerations

As part of the review the Trust has considered the rationale for the "first look" arrangements under which BBC Worldwide has an opportunity to acquire most BBC rights before they are offered to competitors. The Trust remains satisfied that the rationale in favour of the first look arrangement within existing structures remains strong. In particular it enables proper control of the BBC's brand and reputation to be maintained as its content is exploited commercially. The Trust is also mindful of the economies of scale it creates and has noted that many other content producers use similar 'vertically integrated' approaches.

The Trust and the BBC Executive have also been considering whether any adjustments to the current governance arrangements for the BBC's commercial activities might be necessary to ensure that the mechanics underpinning the controls are both streamlined and effective. This work is closely linked to the current public policy debate about BBC Worldwide and is ongoing.

It comes after the division’s controversial £90 million acquisition of the Lonely Planet guides and the subsequent launch of a spin-off magazine which, unlike most Worldwide products, is neither tied to nor related to an existing BBC show.

I still believe this was a brilliant strategic move, but they should have concentrated on building a mobile platform to exploit the content, rather than trying to launch a magazine.

Though BBC Worldwide cited economic pressures for recently shutting with the loss of four jobs, some industry observers believe the environment site exceeded the broadcaster’s remit and parts of the site looked as though the corporation was campaigning.

BBC Worldwide has doubled its profits in the past year and made £112.5 million before tax in the 12 months to March, largely due to lucrative sales of TV shows and formats overseas like Top Gear and Strictly Come Dancing.

Though the trust says it wants to maintain Worldwide’s commercial “vigour and strength”, chairman Sir Michael Lyons told Times Online: “We believe that [Worldwide] needs a tighter set of guidelines. We want to see a little less activity overseas, and for Worldwide to predominantly concentrate on BBC intellectual property.” Lyons says the public value tests carried out before Worldwide makes any acquisitions “will be tougher in the future”.

As Digital Britain rolls on, the trust won’t pass comment on the possibility of Worldwide forming a new PSB JV with Channel 4, but is working with the BBC executive to assess the public benefit of such a move. The real questions surrounding the regulation and remit of Worldwide will have to wait until that is sorted out.

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