John Smith

CHIEF EXECUTIVE'S REVIEW - [Page 2]

The Web 2.0 world offers a prolific pipeline of other opportunities that we are uniquely placed to exploit. At the same time, we remain alert to the risks and challenges we are likely to encounter in this brave new world. For a start, it is critical that we secure a reliable flow of rights. After all, our shop window would look rather bare without them. Our relationship with the independent producers is critical to keeping our shelves stocked with quality content that people want to buy. The Indie Unit continues to play a vital part in managing our relationship with the independent sector, where a good proportion of our star content originates.

During the year, we agreed two joint ventures with Ragdoll, an inspirational TV production company that we are proud to call a partner. As we progress more deals with other indie producers, we are also working hard to build stronger relationships with the BBC's in-house production talent, whose creativity and excellence is so crucial to our success.

Which brings me on to the subject of our own people. Their talent and dedication is the oxygen that brings our business to life. The courage and vision that they have shown in embracing the digital revolution will be another important factor in our future success. During the year, we carried out a thorough review of the vision and values that underpin our internal culture. We embarked on the exercise because we were concerned that if we wanted to step up to the next level, we needed the clarity of purpose to transform ourselves from a competent player into a market leader.

Internal leadership is a vital part of this process, and at this point I would like formally to welcome three of the year's most important new hires: Garth Ancier, who now heads up all our business in the US; David Abraham, who joined UKTV as CEO; and Steve Macallister, who joins in July 2007 as MD, Global TV Sales. While they have a lot to teach us, I am confident that they will also learn a lot from the people they will be leading.

I would also like to mention our new Non-executive Board Directors: Simon Clift, Global Chief Marketing Officer with Unilever, and Thomas Geitner, formerly Chief Technology Officer at Vodafone until December 2006. Together with Chairman Etienne de Villiers, I feel proud to be working with such an extraordinarily talented Board.

I am confident that we have the talent and energy to transform BBC Worldwide into one of the world's premier global content networks.