The Future of Journalism: a joint Media Alliance & Walkley Foundation initiative

5.6 Church and state: BBC online

The BBC has discovered that Britney sells. But it has taken the digital revolution and a new generation of journalists and online readers to show Britain’s public broadcaster the way forward. BBC’s head of online news and current affairs, Pete Clifton, stresses the day-to-day exploits of the rich and famous are not the first priority for possibly the world’s most powerful news brand. But they are bringing a new generation to the site and boosting the BBC’s coffers. The BBC was established as a strictly non-commercial operation, funded by the taxpayer through an annual licence fee.

Attracting the advertising dollar should be anathema in Auntie’s newsrooms. And so it is. But Australian-born Kym Niblock, BBC.com managing director, is charged with making as much money as she can. Last year, that was £800 million in sales and advertising revenues, £111 million of it ploughed back into the BBC for its internationally renowned programs. Between them, Clifton and Niblock represent the “church and state” relationship that the commercial operation that the BBC has with BBC Worldwide.

As the head of BBC.co.uk Clifton manages a news service consumed, one way or another, by about 80 per cent of adult Britons. The BBC brand is highly trusted as a publicly funded operation with no relationship to advertisers or a profit motive. BBC.com, in contrast, is all about making money for the corporation. BBC.com packages content from the public broadcaster and uses it overseas – alongside advertising. This includes news and current affairs programming and other BBC-generated content. In partnership with several international interests, BBC Worldwide (the parent of BBC.com) sells BBC content to overseas broadcasters and online operations. Sophisticated geo-IP software ensures UK consumers cannot see the advertising on those overseas sites.

According to the BBC Worldwide 2006-7 annual report, bbc.co.uk has more than 1.2 billion off-shore page impressions a month. Niblock refers to bbc.co.uk as the “public service”, establishing a clear delineation between the tax-payer funded domestic BBC and BBC Worldwide. Two recent deals stand out. Last year BBC Worldwide negotiated with YouTube to establish a branded channel showing BBC content. In the first month of operation, more than four million BBC videos were viewed on YouTube. More recently, BBC Worldwide made a similar deal with MySpace, expecting similar success. Clifton said the corporation believed “old media” news distribution: ie scheduled TV and radio bulletins, was rapidly declining and so huge resources go to developing and exploiting platforms such as the Web, IPTV and mobile phones.

The numbers look good. The website’s users are growing at about 25 per cent per year, and it now has about 5.5 million unique users a day. Significantly, Niblock – originally from Adelaide and Sky TV – uses the term “arm’s length” to describe the relationship between BBC Worldwide and bbc.co.uk: “Public service is supported by the licence fee. Worldwide is a subsidiary that is 100 per cent owned by the BBC. But we are a fully commercial business. We do not receive subsidies or hand-outs from the BBC – everything we do has to be commercially paid for and at arm’s length from the BBC – essentially we could be called ‘Brand X’ and be another business. “What is proving really successful for us is there is a market for premium product and we absolutely pitch the product as premium. We go to the market and people might say our CPMs (cost of page impressions) are higher than CNN. We say we think it’s a hot product. We say we think they do better in the market, the profile of the people they bring to you is much better than some of our competitors. We are aggressive about it and that’s all there is to it.”