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BBC's commercial arm eyes expansion to match global rivals

A woman leaves an original entrance to the BBC's New Broadcasting House building in central London December 20, 2012. REUTERS/Toby Melville
A woman leaves an original entrance to the BBC's New Broadcasting House building in central London December 20, 2012. REUTERS/Toby Melville

By Belinda Goldsmith

LONDON (Reuters) - BBC Worldwide, the commercial arm of Britain's public broadcaster, unveiled a three-pronged plan on Friday to expand globally by boosting spending on TV content, strengthening its online site, and launching three new channel brands.

Tim Davie, who took over as head of BBC Worldwide in April, said BBC Worldwide had too many different websites and digital propositions, saying there needed to be a greater focus and scale to compete with global rivals, such Hulu, Netflix and Amazon, owner of LoveFilm.

Davie outlined plans to increase spending on content by 30 million pounds ($48.56 million) a year to about 200 million pounds, announcing a new drama series, "Intruders", from the writer of "The X-Files".

He said the launch of three new channel brands focused on natural history, drama and "male audiences" would help promote BBC content to international audiences in different formats from standalone TV channels to online offerings.

One of these new channels, BBC First, will launch first in Australia on the pay-TV Foxtel platform next August.

The third prong of the strategy involved scrapping a global iPlayer app launched in 2011 and instead strengthening international online site BBC.com to help the BBC meet its target to double its global reach to 500 million people by 2022.

BBC Worldwide's increased ambitions come as the BBC faces criticism over whether it is giving value to the British public after paying large severance packages to departing managers and scrapping a 100 million pound digital media project.

Davie said the new investments would enable BBC Worldwide to grow internationally via its own services and third party sales, and raise more revenue.

"(This will result) in greater access by audiences to BBC and British content and sustainable cash flows back to the BBC," Davie said in a statement.

BBC Worldwide posted sales of about 1.1 billion pounds ($1.78 billion) in 2012/013 and returned 156 million pounds to the public service broadcaster that is funded largely by license fees paid by all British households with a television.

Last week, Tony Hall, director general of the BBC, the world's largest state-funded broadcaster, said the organization had to cut costs by 20 percent by 2017 but also needed to find an additional 100 million pounds a year in savings to invest in the future.

Davie said the three-pronged plan for BBC Worldwide was an effort to make the BBC truly global.

"They combine an increased commitment to content investment with new BBC content brands alongside a more powerful and unified digital engine," he said.

Analysts said it made sense to simplify the way BBC Worldwide reached its audience by focusing on BBC.com.

"It all seems to make sense but there are underlying questions about whether BBC Worldwide should be investing in its own productions or seeking to return the maximum possible amount to license fee payers," said Steve Hewlett, a media analyst and former executive with broadcaster ITV.

(Editing by Elaine Hardcastle)

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