BBC Embraces a Worldwide, Digital Future, While Making Painful Cuts
Important Details: The BBC is remaking itself in a new six-year plan, pushed by lower core revenues and an audience moving to the internet. It cited this backdrop to the announcements: “The BBC News website is reaching a weekly unique average of six million users in the UK. BBC mobile has reached an all time monthly high for News, Sport and Weather at two million users. And 75% of consumers of news on mobiles are under 44 years old – compared to 25% for the television news bulletins.” Add to that an overall increase of 12% in online usage, since 2001, against a drop of 5% in TV reach.
Among the flurry of recent announcements:
- The annual increase in the license fee (the BBC is largely funded by a flat fee collected from UK-based owners of televisions) will average 1.4% p.a. over the next five years resulting in an expected £2 billion shortfall, leading to an announcement of staff cutbacks and reorganization. At stake are as many 1800 of the BBC’s 18,000 jobs, with BBC News looking at a net reduction of 370 positions. Other positions are in midst of re-definition as the BBC moves to converge its TV, radio and internet programming.
- Outside Britain, the BBC is embracing a web advertising model. Noting that more than half of the site’s users are located outside Britain – and thus don’t pay anything via the licence fee – the site will display ads to overseas users only, a first for the BBC, and the source of some concern given the long non-commercial legacy of the enterprise.
- The BBC’s internet push includes new programming including more customized “My News Now,” and “My Local News”, and many of the tools of the moment, including user-generated content, podcasting, and of course web-presented audio and video. In this longish, but informative (check reader comments as well) description of the many changes underway, BBC news director Helen Boaden cites both the competition and innovation of the Guardian and the Telegraph as spurs to the BBC changes. The BBC will increase digital funding by 21% over next five years, while providing only a 6% increase to its traditional journalistic pursuits.
- Building on a partnership with U.S. public radio network, Public Radio International (PRI), with which it produces “The World“, the BBC will be part of an ambitious project, a new daily morning public radio program. To be launched in March, the program’s other partners include The New York Times, New York City’s WNYC and Boston’s WGBH.
- BBC Worldwide, the commercial arm of the BBC, recently announced the acquisition of 75% of Lonely Planet, publisher of more than 500 travel guidebooks each year. It’s a cross-medium, distribution play as Etienne de Villiers, non-executive chairman of BBC Worldwide, points out: “The association will strengthen Lonely Planet’s visibility and growth potential, particularly in the digital arena, as well as providing their users access to the wide range of BBC content which connects with their interests.”
Implications: Even the venerable BBC is becoming a creature of the marketplace. Once again, we’re learning that whatever a media company’s business model was in the old days, it needs to be re-configured for today’s digital environment. This new age of convergence offers tremendous promise, and the BBC’s moves – however painful – are cognizant of that promise.
Look at the partners involved in its projects, on both sides of the pond, and you begin to see how companies that used to stay in their own sandboxes – print newspapers, public radio, travel publishing – are now thrusting themselves into the digital playground. The synergies of joint internet/broadcast/print distribution (create once, distribute thrice) are apparent. Outsell believes that companies such as these, building on diverse roots, are forming new audiences, products and businesses fit for our times.