The target we set in 2006/07 of generating 10% of our sales from
digital activity by 2012 seemed challenging at the time, but
progress since then has been good and we are on track to reach our
goal next year.
In order to reduce our reliance on physical products, we sold a
majority stake in our audiobooks business in July 2010, and are
currently in exclusive discussions regarding a possible partnership
to help develop our well established magazines business towards a
BBC.com is our flagship property online. This website offers BBC
news and lifestyle content in an advertising-supported environment
for international audiences and helps extend the reach of the BBC
brand around the world. Our objective in 2010/11 was to build
advertising revenue, aided by the introduction of localised
editions to increase relevance to visitors. A US edition was
introduced during the year, contributing to BBC.com revenues
increasing 113%. Close to year end, an Asia business edition was
launched and we will continue to invest in further localisation in
the year ahead.
We also introduced a travel section, produced in conjunction
with Lonely Planet, and will look to enrich the site with other
The rise of social media is also firmly on our radar. It has
already provided an interesting opportunity for us to manage fans'
interaction with the Top Gear brand on Facebook and to drive
traffic to our own website topgear.com (see Social Media Friends
& Fans on our "Develop
more direct connections with consumers" strategy page) and
we are applying our learning from this initiative to other brands
in our portfolio.
Digital programme syndication
Another major area of our digital activity is licensing TV
programmes to third parties that offer download-to-own and
download-to-rent services. The former allows the consumer to keep a
programme in perpetuity, the latter offers the opportunity to view
it once or only within a finite time period.
Given the steady increase in online TV viewing worldwide (see Market
Context), this business is in very good health. Our strategy
has been to work with a wide range of players on non-exclusive
terms in order to test the market and grow our understanding of
consumer preferences. We believe this remains the best approach
given the wealth of new services and devices that are continually
being launched. We will start piloting our own global BBC iPlayer
service in summer 2011.
Digital sales of programmes via our online shop bbcshop.com and
third-party download sites grew by 45.7% year on year.
Download-to-own sales are managed alongside our DVD business within
2 entertain in order to coordinate product releases effectively
across all formats. 2 entertain has also started releasing titles
in hybrid formats (a digital copy packaged with DVD and/or Blu-ray
disc) which has helped maintain sales in the mature DVD
BBC Worldwide has also played its part in the rapid emergence of
apps available for smartphones and tablets. During the year total
downloads exceeded the 12m mark, of which 9m were Lonely Planet
travel apps for smartphones and Apple iPads. Other titles we offer
include the BBC international news app, The Mazes of Time (Doctor
Who game) and various recipe apps from Good Food Magazine.
We have set up a Games Unit based in Los Angeles and London to
address a growing digital opportunity. Fuelled by new technologies
such as Microsoft's Kinect for Xbox 360 and powered by the rise of
social and mobile platforms, the market size for games is now over
$60bn worldwide (DFC Intelligence).
The team is developing games linked to our major brands across
all major platforms including Sony, Microsoft and Nintendo
consoles, mobile and tablet devices, and Facebook. Some key
initiatives include a massively multiplayer online Doctor Who game,
a partnership between Top Gear and Forza (see right), and Facebook
games in development. Consumer interest in BBC games worldwide has
been strong - so far in 2011 over 250,000 BBC-branded games have
been sold on Apple devices alone.