Media: All about ... BBC Worldwide

The BBC's commercial arm is moving to centre stage.

Since the late 80s, when a relatively sleepy organisation called BBC Enterprises began morphing into the BBC Worldwide we know today, the corporation's international strategic outlook has been shaped entirely by the calendar. We're talking about a ten-year cycle here, one that is determined by the inconvenient fact the BBC exists by virtue of a Royal Charter that needs renewing once a decade.

As the Charter review process begins to kick in, roughly three years before renewal is due, you'll find the BBC Worldwide corporate beast at its most modest and demure, attempting to blend into the furniture as it makes more or less plausible noises about acting responsibly to get the best out of existing BBC assets, mainly to relieve pressures on the licence fee.

But as soon as the new Charter is secured, all semblance of restraint tends to fall away - and you find Worldwide unveiling blueprints of a global media empire to rival the News Corps of this world. It's not always a pretty sight.

Therefore, in an attempt to fathom why BBC Worldwide recently paid £100 million to acquire 75 per cent of the travel guide business Lonely Planet, or in assessing the merits of moves to reinvent as a full-blown ad-supported commercial entity, it will help to remember that a new Charter was granted to the BBC with effect from 1 January 2007.

And it's ironic that Worldwide is contemplating a leap forward at a time when the BBC's director-general, Mark Thompson, has (in response to a below-inflation licence fee award) begun forcing through painful structural changes in the corporation's UK TV operations - changes he believes will create a smaller domestic BBC "but one which packs a bigger punch".

Senior strategists will argue that this sort of local domestic difficulty shows beyond all shadow of a doubt that BBC Worldwide has a greater-than-ever duty to rake in the cash. Equally, however, there will surely come a time when it is difficult to remember which bit of the BBC is the tail and which is the dog.

1. Historically, the remit of BBC Worldwide (and its predecessor organisations) was to oversee publication of the Radio Times and various masthead spin-off magazines, plus the sale of BBC Television programmes to non-UK broadcasters. This remit changed out of all recognition with the explosion in multi-channel television platforms from the mid-90s onwards. For instance, it struck a joint venture deal with Flextech in 1997 to launch UKTV. But the real step-change came with the launch of international TV brands such as BBC World.

2. In July, following an announcement of a 24 per cent increase in pre-tax profits to £111 million, BBC Worldwide's chief executive, John Smith, revealed he was building a £400 million war chest for future acquisitions. He also unveiled his intentions to grow overseas revenues, 46 per cent in 2006/7, to 66 per cent by 2012. Online revenues are expected to be a significant element of that growth.

3. The BBC's international commercial channel properties include BBC World, BBC Prime, BBC America and BBC Food. A second wave of channels, including BBC Entertainment, BBC Knowledge, BBC Lifestyle and CBeebies, is currently being rolled out across the globe. Additionally, there is a joint venture agreement with Discovery Communications Inc.

4. In the run-up to Charter renewal, the BBC leaked stories that it was considering selling assets, including its magazine division. In the end, it parted with only one title, Eve. It also indicated that it was to shelve plans to introduce advertising on

5. Internet-delivered content is now central to the BBC's survival plans in the UK, as well as its expansion abroad. In March 2007, BBC Worldwide entered into an exclusive global content agreement with YouTube. It has also been investing in the development of a commercial media player that will allow UK and international audiences to watch content via the internet after the seven-day catch-up service offered by the BBC's public service iPlayer.

6. According to last week's statement from the BBC Trust, advertising will now be carried "on a subset of pages of the existing ( website, including the home page and selected news, sport, weather and science and nature pages visible only to international users of the site".



- Enemies of the BBC (and, strange to relate, there are a few) will argue that the corporation should be given just as much rope as it needs. They argue the organisation will, at some point, implode under the strain of inherent internal contradictions.

- Those contradictions are never more stark than when strife on the public service side coincides with aggressive expansion in its commercially funded activities.


- Media agencies are often reluctant to criticise the BBC, even when it is (even theoretically) acting against the commercial interests of their clients.

- And clearly, you can argue that the BBC's online activities continue to stifle the development of homegrown commercial online operations. It uses the licence fee to dominate the domestic online audience and then uses licence-fee-generated content to take more than its fair share of internationally derived online revenues.

- But many agencies are confident the BBC can keep the UK and international sides of its business separate, even in a borderless digital world. Jim Marshall, the chairman of Starcom and the IPA's Media Futures Group, comments: "Obviously you can argue there are future ramifications arising from the decision to carry ads on, but currently it doesn't have too many implications for the UK market. I don't believe it's a major issue."