BBC Worldwide goal: going green

Doubling of profit sought as license fee disappoints

BBC Worldwide plans to double pretax profits to £200 million ($384 million) over the next five years and will controversially partner with private equity partners or corporate players to finance its expansion plans in key markets, it was announced Monday.

Speaking at the Financial Times digital media and broadcasting conference Monday, BBC Worldwide chief executive John Smith said that the pubcaster's commercial division plans to increase international revenue by almost a third over five years, following the BBC's lower-than-expected license fee settlement earlier this year.

In order to raise investment capital for the expansion program, the pubcaster plans to partner with either private equity groups or corporate partners in key expansion markets including the U.S. and Canada, Australia and India, BBC Worldwide strategy head Luke Bradley-Jones said in an interview.

"In order to grow, we are going to need increased financial firepower," he said. "We can partner with financial partners in key markets, and it's quite likely that we will do that with private equity partners and corporate players with more normal abilities to build investment funds and increase capital."

His comments will stoke controversy about BBC Worldwide's role in the commercial marketplace, where rival digital players believe it already has too much influence.

In front of an audience of media executives, Smith reiterated BBC Worldwide's medium-term growth strategy, which includes growth through the launch of new BBC-branded international entertainment and news channels along with ramped-up activities across the BBC Web portal, bbc.co.uk, including the launch of social networking sites built around BBC magazine titles.

The BBC last week announced a significant partnership with YouTube and Google that will see clips from current BBC shows and archived BBC favorites launch on two branded channels.

The BBC also is planning the launch of an international BBC-branded interactive media player, which will allow overseas viewers subscription access to a range of current and archive material.

"We are pursuing this strategy to make money," Smith said.

"This year we made over £100 million ($192 million) for our parent, the BBC, enabling it to reinvest in creating more great content for its license-fee-paying audiences. Having nearly trebled profits in the business in the past three years, we now want to double the size of the business again, and much of that growth will come from digital," Smith added.

The BBC was disappointed by a below-expectations license fee review earlier at the end of the year.

The settlement will guarantee its income for the next 10 years but averages an increase of about 2% a year, far short of the increase of 6% plus called for by director general Mark Thompson.
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