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BBC Worldwide Digital Media
David Moody, MANAGING DIRECTOR
As access to broadband expands across the globe, Digital Media is ideally placed to be one of the world’s most effective
distributors of rich web content.
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Digital Media’s web strategy has two parts. First, to have a network of strong BBC-branded sites, supported wherever
possible by TV channels and magazines. Secondly, to distribute BBC Worldwide content widely across the web to reach potential
users who are unlikely to come directly to BBC Worldwide’s own sites. Digital Media achieved real progress in all of its online-based
businesses during 2007/08 and the team worked closely with other areas of the company to guide and support the development of existing
and new websites.
Overall BBC Worldwide saw an increase in online revenues from 1.1% to 2.7% of total sales year on year. This reflected growth from
Digital Media businesses as well as magazine websites and video on demand sales reported elsewhere in this Review. Substantial investment
in bbc.com and new project Kangaroo, as well as in developing infrastructure and acquiring rights in order to drive
long-term growth, will continue through 2008/09.
Digital Media delivered sales of £21.9m, up 57.6% year on year, driven by revenue from syndication of content to partners such as YouTube
and Apple iTunes and by the launch of bbc.com. However, losses increased to £(10.9)m from £(3.9)m in 2006/07, largely as a result of
investment in developing bbc.com and the proposed Kangaroo service (see below). Costs for Kangaroo are included in the digital
syndication business figures. The revenues gained from digital syndication were more than offset by the cost of the start-up businesses.
In October 2007, BBC Worldwide gained BBC Trust approval, subject to certain conditions, to introduce advertising to the international
traffic to bbc.co.uk. The service, known as bbc.com, was launched in November 2007 and is visible only from outside
the UK. The revenues will allow BBC Worldwide to invest to make bbc.com the international showcase for the BBC’s key brands. The
company intends to build on the existing strong position of the BBC website internationally, grow its reach, add more content, and
make this content more relevant to overseas users through personalisation and localisation. bbc.com delivers a new flow of income
into the BBC for investment in its core journalistic mission and capabilities, in addition to the fees that BBC Worldwide pays
the BBC for the rights and services it uses.
The service, only visible to ex-UK users, launched with advertising on the most visited parts of the website – news and weather and a new
homepage – in November 2007. During 2008/09, advertising will be rolled out to other high-traffic areas of the site. In addition, an
international commercial iPlayer functionality is being explored.
BBC Worldwide is developing a proposal for a commercial media player in partnership with ITV and Channel 4. In 2007/08 an independent
joint venture was created by the three broadcasters to develop a new UK on-demand service known to the industry as Kangaroo. The proposal
is subject to various approvals, including that of the BBC Trust. Should it be successful in securing these approvals, it would become an important site for those seeking to access
UK-aired TV content on the web. Over 10,000 hours of TV content would become available and revenues would be generated from a mix of
advertising-supported and pay-funded content. In April 2008, Ashley Highfield, formerly Director of the BBC’s Future Media and Technology
Division and the key architect of its very successful public-service iPlayer, was appointed as CEO to take the proposal to the next stage.
The Digital Media team also works with major online partners to ensure BBC content is available across
a range of platforms to a wider audience than is reached by BBC Worldwide’s own websites.
In February 2007 BBC Worldwide became the first global broadcaster to partner with YouTube,
and in January 2008 it secured a worldwide deal with MySpace to provide clips of BBC content
to MySpace TV. It also signed an agreement in the UK to sell BBC programmes on a download-to-own
basis via Apple iTunes, a deal repeated in the US and which will be replicated in other territories
around the world. Another deal was struck with Sony Playstation for Top Gear to be downloaded through
Gran Turismo TV. Such agreements help establish BBC Worldwide as a leading UK distributor for both
BBC and independently produced content on digital platforms.
Digital Media has created a centre of expertise in building and operating websites as well as syndicating content. It works with other businesses, particularly Magazines, to enhance existing sites
and introduce compelling new services supporting people’s 'passions'. The team invested in recruiting expert personnel in London, New York and
Melbourne during the year. Working alongside other BBC Worldwide teams, Digital Media has created a global advertising sales capability and has
also invested in a dedicated global rights team.
During the year this video archive sales operation successfully developed new business in a variety of digital markets and continued
to expand its geographical reach. Continued investment in the website helped online sales grow by 47.0% as part of an overall 5.5% growth
year on year. Profits, however, were reduced as a result of increased infrastructure costs. These were required in order to provide a platform
for future growth in a world where demand for online video content is increasing rapidly.
In 2008/09 Digital Media aims to enhance bbc.com significantly, launch Kangaroo, if approvals are granted, and
continue to develop its content syndication business. Profits will again be impacted by investment costs.