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BBC nightmare to worsen

July 13, 2015

It was widely reported on July 12th that the BBC is to face tough external scrutiny, and perhaps a complete restructuring. The government is setting up a panel of eight advisors to look at how the BBC is funded, run and spends its huge licence fee income.  Also included in the ‘Green Paper’ consultation document is a planned close examination of BBC Worldwide, the broadcaster’s ‘commercial’ arm.

The Rupert Murdoch-backed Sunday Times gave a detailed list of topics likely to be included, and these included questions as to whether the BBC should even be showing populist ratings-winners such as The Voice, and whether the BBC is correctly fulfilling its core mission.

The BBC’s supporters are vocally asking whether the eight-person advisory board is not a tad too biased against the broadcaster, given that the list includes Dame Dawn Airey, a former BSkyB, ITV and Channel 5 boss (and now a Yahoo exec). Dame Colette Bowe is former head of Ofcom, and heads up arch-critics of the BBC, the Voice of the Listener & Viewer. Ashley Highfield, a former Flextech and BBC exec (who supervised the introduction of the iPlayer and now notorious Digital Media Initiative). He now runs print publisher Johnston Press.

That the BBC is a savvy, competitive organisation is undoubted.  The BBC licence fee is worth £3.7 billion. Add in other commercial activity (including BBC Worldwide) and the 2014 revenue picture leaps to £5 billion.

That’s the good news. The bad news comes from the BBC Worldwide division, where salaries are eye-wateringly high and the returns quite miserable. Last year BBC-WW returned just a net £174 million to the overall coffers out of headline revenues of just over £1 billion.

Despite piggy-backing (and investing) on many of the BBC’s high-profile shows (Doctor Who, Hidden Kingdoms, The Musketeers, Atlantis, etc.), BBC-WW performs quite poorly compared to its commercial rivals.

A perfect example is documentary rival Discovery Communications. In its 30th year, Discovery has grown exponentially from a single channel in a single market, to a global presence with typically 10 channels in some 220 territories, and with its subsidiary Eurosport has just acquired for £920 million the TV right to the Olympic Games for 2018-2024 (the BBC holds onto rights for 2018 and 2020).

Big deal, you might argue. But Discovery manages this empire with just 7,000 staff, and last year it saw revenues grow 13 per cent to $6.26 billion, up $730 million on the previous year. International revenues are booming (Q4, up 17 per cent) and last year Discovery International’s revenues grew to more than 50 per cent of the company’s total.

Discovery is not a public-service broadcaster. It doesn’t have to cover news, or religious, or other obligatory niche services. Nor do they have to mount The Proms, or 101 other excellent programmes including drama, factual and entertainment. Discovery is unashamedly commercial, yet its kids channel is the Number 1 such channel in Latin America. It broadcasts free-to-air channels in many countries, fighting out in the marketplace for its ratings. And it makes wonderful documentaries. Once, many of them (Frozen Planet, Blue Planet, Wonders of the Solar System, etc.) used to be supplied by the BBC under a 10-year joint venture that ended in 2013.

Critics of Discovery might argue that it’s all about ‘Shark Week’, or never-ending docs on World War 2 or Cleopatra! That would be unfair in a 10-channel or so portfolio, let alone its buying of the Olympics rights.

Discovery just seems to go from strength to strength. Selling its English-language programme around the world, while at the same time creating local shows that reflect the tastes and expectations of that local market.  Do the likes of Gold Rush, Deadliest Catch or Wheeler Dealers win Emmys? Perhaps not, but they win eyeballs. What does work extraordinarily well are global events such as when Nik Wallenda walked the Grand Canyon without a net! That made a zillion global headlines.

It might be the right time for a thorough overhaul of the BBC, and in particular its Worldwide arm. BBC-WW programming deserves better, and the salary and compensation packages for its bosses review. £670,000 for CEO Tim Davie is high, but he is just one amongst dozens of high-earning executives. It doesn’t help that Davie received a £231,000 bonus despite a 21.5 per cent drop in pre-tax profits.

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