APPENDIX 3
Memorandum submitted by BBC World Service
QUESTION 1: THE
WORLD SERVICE'S
FUNDING ASPIRATIONS
FOR THE
NEXT COMPREHENSIVE
SPENDING REVIEW
"A service to the world as a whole"
and "perhaps Britain's greatest gift to the world during
this century"—this is how the Secretary-General of
the UN, Kofi Annan, has described the World Service. For decades
the World Service has been the world's most successful international
radio broadcaster. The challenge now is to ensure that it strengthens
this position in the digital age. In early 1999 the World Service
launched its Three Year Plan to begin to meet that challenge and
to take full advantage of the 1998 Comprehensive Spending Review
settlement.
Already major progress has been made:
— Our measured global audience is now
151 million—the highest level ever, exceeding the agreed
target of 147 million.
— Traffic to our online sites has grown
by 240 per cent since December 1998 and has now reached over 24
million page impressions a month. World Service audio is the most
listened to audio news online in the world. In the Kosovo conflict,
our Serbian language site was accessed from inside Serbia and
also across the world. Our online discussion forums are drawing
thousands of participants from across the globe.
— We are now present on FM in more
than 100 capital cities, and have increased our FM audiences by
five million over the last year. We became the first international
broadcaster to transmit on FM in Jakarta and four other Indonesian
cities. Our African programming could be heard on FM during the
elections in Nigeria, and we now broadcast on FM 24 hours a day
in the Kosovan capital Pristina.
— Through commercial distribution partnerships,
both online and with FM rebroadcasters, we have substantially
increased the reach among target audiences at no operating cost
to the Grant in Aid. These partnerships have generated 40 per
cent of the World Service's audio usage online and at least 70
per cent of the World Service's global FM audience of 31 million.
— In April 2000 the number of our mixed
programme English schedules on short wave across the world increased
from three to eight. We also launched a 24-hour news and information
audio stream in English on the Internet.
— A recent independent survey among
MPs shows that 97 per cent believe the World Service brings significant
benefit to Britain, with the same overwhelming support for the
expansion of our Internet services and FM. An independent survey
among opinion leaders outside parliament, heavily weighted towards
business leaders, shows similar overwhelming support for the World
Service. In the first ever survey of British ambassadors across
the world, 92 per cent agree BBC World Service enhances Britain's
image overseas. 97 per cent support the view that the World Service
must invest in new technologies such as FM and the Internet.
The World Service is a major success story.
But it faces huge competitive and technological challenges. By
investing now for the future it can retain its leading role for
Britain.
The online revolution is transforming the way
people and nations create wealth, do business and communicate
with each other. We are now entering the e-world, audience behaviour
is changing and our competitors are investing and expanding.
Technology
— The Internet is growing much faster
than expected: some of the fastest growing areas are China, India,
and Latin America.
— Technologies to deliver streamed
audio and video on the Internet are developing rapidly, and multimedia
content is becoming the norm on major news sites. Audio on the
Internet is already of medium wave quality and will very soon
be FM stereo standard.
— Mobile telephones and other mobile
devices are also emerging as a key future distribution platform
for news.
— Digital radio delivery, both terrestrial
and via satellite, will offer additional means of reaching audiences
in important markets.
Competition
— Our major traditional international
radio competitors are focusing their efforts on a narrow range
of politically important regions where they represent significant
threats to the World Service position.
— New global commercial news players
are increasingly regionalising, expanding into developing markets,
and introducing services in languages other than English.
— New Internet media players such as
Yahoo and Microsoft are also expanding into many new markets,
and are likely to target World Service heartlands in the near
future.
Audiences
— Enhanced research and analysis is
helping us to understand our target audiences much better than
before.
— In particular, we recognise that
cosmopolitan audiences across the world are heavy users of the
Internet and mobile devices, and that they place significant value
on high quality international news and analysis.
Geo-politics
— In the developing geo-political landscape
of the new millennium, the public service World Service offer
will be essential to serve areas of the world strategically important
to Britain. Moreover, communities riven by ethnic conflict or
with restrictive regimes will continue to benefit from an unrivalled
service of accurate, impartial and independent news and information.
If the World Service is to retain its pre-eminent
position as the best known and most respected international broadcaster,
it must adapt to these changes with a dynamic multimedia strategy.
FOUR KEY
INITIATIVES FOR
2001-04
Online
The World Service must now be the world's reference
point not only on radio but also on the Internet. We will build
on our current online success, establishing the world's leading-edge
and best multilingual online news site. By 2004, we plan to provide
full 24-hour news offerings on world-class Internet sites in Chinese,
Arabic, Russian, Spanish, Persian, Portuguese, Hindi, Indonesian
as well as in English. We will enrich our online content with
greater depth of analysis and more audio and video. Creating the
world's leading multilingual news site will enable Britain to
be the e-world's reference point for high quality, objective,
independent news and information.
FM and distribution
We aim to be present on FM in 135 world capitals
(70 per cent) by 2004. Following the developments in our English
programming, we will have an ambitious programme to acquire FM
relays in key international cities. Our research indicates that
an FM presence in major cities is particularly effective for targeting
opinion formers and can double audience reach. We will also work
with new distribution platforms such as digital radio and mobile
telephones in order to reach our audiences via all new relevant
devices.
Regional windows
We plan to build on the increased number of
tailored schedules in English and new online language developments
to provide increasingly regionally targeted content. We will build
on our existing regional production hubs to develop more regional
tailored networks, providing co-ordinated multilingual offers
from correspondents in a range of locations linked by high-quality
digital systems. By providing the most authoritative regional
news and analysis, the World Service enhances its relevance to
audiences, strengthens its competitiveness, and reinforces Britain's
reputation for trustworthiness. It also presents a UK that is
sensitive to cultural diversity.
Content
We must increase and enhance our output in key
areas that need it most. We will develop our business news programming
to promote Britain as a centre of excellence for business expertise
and reflect the global role of the City of London. Working with
the British Council we will develop a pathway to English language
learning with a seamless offer across radio, online, text and
courses in the target area. Particular priority will be given
to China. We will produce major series of landmark educational
programming on issues of global importance that will strengthen
our role as "the world's reference point".
By 2004, these investments will deliver the
following benefits:
— A global World Service radio audience
of 151 million weekly listeners;
— A global World Service online audience
of 15 million monthly users;
— The highest reach of all international
broadcasters in priority markets among target audience groups,
in particular cosmopolitans (opinion formers);
— The highest ratings of all international
broadcasters for trust, esteem, and authority of news content;
— An unrivalled range of modern and
relevant distribution platforms, using partnerships wherever possible:
via FM across the world, including in 135
capital cities;
via the Internet, through global and regional partnerships;
via all new significant digital platforms adopted
by our audiences, including mobile devices and digital radio.
— An increasing contribution from commercial
revenues and partnerships to help fund distribution, while protecting
the World Service's editorial independence by continuing to fund
content from the Grant in Aid.
Britain will benefit from significantly increased
strategic co-ordination between the World Service and other arms
of the BBC in key international markets, thereby increasing the
value of the Grant in Aid.
In the longer term, these investments position
the World Service for substantial audience growth within the total
BBC offer, embracing radio, online, and television.
The cost of new activities in this strategy
totals £27 million in operating expenditure by 2003-04. The
existing Grant in Aid baseline, together with a rigorous efficiency
savings programme, expanding external income and further initiatives
to drive up value will enable the World Service to meet 95 per
cent of its rising costs during this period. In addition, commercial
distribution partnerships will make a major contribution to substantially
increasing the reach among target audiences both online and via
FM at no cost to the Grant in Aid.
However, to deliver the benefits outlined in
this paper, an uplift in the Grant in Aid over the three years
2001-04 of £7 million, £19 million and £28 million
in operating expenditure and, in the second and third year, of
£15 million and £14 million in capital is needed to
finance new investments. This would ensure that the World Service
remains the world's best known and most respected voice in international
broadcasting for the digital age and that it continues to bring
significant benefit to Britain in the new millennium. Moreover,
new funding will be invested in new developments.
NEW INVESTMENT PLANS
|
| 2001-02
£m
| 2002-03
£m
| 2003-04
£m
|
|
| Online investment | 4.8
| 9.6 | 15.3
|
| Regional windows | 0.7
| 2.1 | 3.1
|
| Content: Geo-political developments | 0.8
| 1.6 | 2.3
|
| Content: Business Programming | 1.0
| 1.5 | 1.5
|
| Content: English Language Teaching | 0.5
| 1.0 | 1.0
|
| FM distribution | 1.0
| 2.4 | 3.4
|
| Total new investment proposals (rounded) |
9 | 18
| 27 |
| Rising costs | 8
| 16 | 22
|
| less: BBC efficiency savings and income growth
| (5) | (10)
| (16) |
| Increase in 2001-02 baseline in existing CSR
| (5) | (5)
| (5) |
| New operating funds requested | 7
| 19 | 28
|
|
In the three years to 2003-04 the World Service must begin
investment in an audibility renewal programme at the key transmitter
stations of Cyprus and Singapore, requiring additional capital
Grant in Aid on a one-off basis:
|
| 2001-02 £m
| 2002-03 £m |
2003-04 £m |
|
| New capital funds requested for audibility renewal
| — | 15
| 14 |
|
|
| Benefit to Britain | Strategic Initiative
|
|
| Britain as leader in the e-world | Establishing the World Service as the most accessed global news and information provider on radio and online, available through the best multilingual news portal in the world: the world's reference point online
|
| Britain as a trustworthy international partner, both politically and economically, and as a modern, creative society
| Build on the World Service's reputation as the most trusted international broadcaster by serving areas of strategic importance to Britain with innovative programming delivered through the most modern distribution systems
|
| Setting the agenda in the debate on global issues
| Landmark programming on the key global issues of the 21st century, combining radio and online
|
| Reduction in the risk of conflict | Targeted services to areas of potential crisis, providing objective information and a forum for debate
|
| Promoting good governance | Targeted programming and training schemes to foster civil society and democracy in the aftermath of conflicts
|
|
The FCO was closely involved in the development of the World
Service's Strategy 2001-04 and has been supportive.
— However, it is now essential that funding discussions
between the FCO and the Treasury are based on the World Service's
full bid and that operating and capital bids are considered separately
— The capital element is for the replacement of
worn-out plant for the Cyprus and Singapore transmitters. Both
serve vital strategic areas of the world—the Middle East
and the Gulf, South Asia and East Asia respectively. Both have
been part of the 10-Year Capital Plan agreed with the FCO in 1995,
but delays now mean they must be refurbished
— It is critical that the World Service receives
adequate operating funding to support the agreed strategy of developing
the Internet presence, FM expansion, regionalisation and content
initiatives—and one-off capital funding to replace and refurbish
the Cyprus and Singapore transmitters
— The World Service's capital requirement does not
constitute a permanent increase in baseline funding. The inclusion
of capital in an overall percentage funding formula could therefore
seriously distort trends in core operating funding.
QUESTION 2: SPECIFIC
PLANS FOR
ADDITIONAL EXPENDITURE
Online: Investments and Benefits
By 2004, the World Service will deliver:
— 24-hour, continuously updated interactive multimedia
online news and information offers in English and eight other
languages.
— A world-leading audio news portal including:
New investment required:
|
| 2001-02 £m |
2002-03 £m | 2003-04 £m
|
| 4.8 | 9.6
| 15.3 |
|
Benefit to Britain:
— A world-leading news presence on the Internet,
underpinning Britain's pre-eminent position in the e-world.
— Britain's ability to reach key target audiences
world-wide with the most modern delivery systems helps provide
a positive image of an innovative, progressive UK.
Distribution: Investments and Benefits
By 2004, the World Service will deliver:
— An FM presence in 135 capital cities, responding
effectively to the deregulation of markets in major cities across
the world.
— The maximum FM presence possible across major
cities, given conditions, in key markets including India, Pakistan,
and Nigeria.
— A quality FM presence in Moscow.
— Where feasible, a presence on all new relevant
and viable digital distribution platforms, possibly including
mobile telephones and devices, digital satellite and terrestrial
radio, and LEO satellites.
New investment required:
|
| 2001-02 £m |
2002-03 £m | 2003-04 £m
|
| 1.0 | 2.4
| 3.4 |
|
Benefit to Britain:
— A local presence in more capital cities, improving
the audibility of the World Service in major conurbations and
increasing Britain's exposure to key opinion formers around the
world.
— Distribution through new digital systems will
both enable better reach of key audience target groups and enhance
Britain's position as an innovative leader in the e-world.
Regional Windows: Investments and Benefits
By 2004, the World Service will deliver:
— Customised audience interfaces around the world
via online and radio.
— World-class tailored regional reporting for six
regions.
— Improved newsgathering through digitally connected
regional newsgathering networks based on hub bureaux.
— Priority regional windows for development are
the Middle East, South Asia, East Asia and Latin America.
New investment required:
|
| 2001-02 £m |
2002-03 £m | 2003-04 £m
|
| 0.7 | 2.1
| 3.1 |
|
Benefit to Britain:
— By providing the most authoritative regional news
and analysis, the World Service enhances its relevance, strengthens
its competitiveness, and reinforces Britain's reputation for trustworthiness.
It presents a UK that is sensitive to cultural diversity.
— Being a world authority in regional reporting
also resonates with non-indigenous ethnic groups in Britain, who
can access this content online.
Content: Investments and Benefits
By 2004, the World Service will deliver:
— An ongoing increase in our broadcasts in Serbian,
Macedonian and Albanian compared to pre-conflict levels.
— An increase in our Persian broacasts to Iran.
— An increase in our Indonesian radio presence,
coupled with an improvement in our transmission coverage through
hiring capacity on the Darwin transmitter.
— Enhanced global business programming in eight
key languages including additional journalistic resources.
— An integrated cross-media English teaching offer
produced jointly with the British Council focused on China.
— Two to three major issue led landmark series initiatives
per year, to run across all our distribution channels and across
a range of our languages.
New investment required:
|
| 2001-02 £m
| 2002-03 £m |
2003-04 £m |
|
| Geo-political developments | 0.8
| 1.6 | 2.3
|
| Business Programmes | 1.0
| 1.5 | 1.5
|
| English Language Teaching | 0.5
| 1.0 | 1.0
|
| Total | 2.3
| 4.1 | 4.8
|
|
Benefit to Britain:
— Additional programming for audiences in countries
in crisis or difficult transitions to democracy will:
— contribute to the prevention and/or peaceful
resolution of conflicts and tensions by providing accurate, authoritative
information to all parties;
— promote good governance and the British values of
a democratic society, openness, fairness, and tolerance;
— underpin a global community based on peace and the
rule of law.
— Quality global business programming will reflect
Britain's position as a financial and economic leader and enhance
perceptions of Britain as a valued partner in international trade.
— English Language Teaching initiatives will strengthen
the status of English as the global language and stimulate interest
in Britain.
— Landmark series on key global issues will support
key British aims of promoting democracy and good government, human
rights, drugs control, and environmental protection.
QZA. WHAT WILL
SUFFER IF
THE WORLD
SERVICE DOES
NOT RECEIVE
ADDITIONAL FUNDING?
The impact would be extremely serious: the World Service
would be in danger of losing its lead in international radio and
would be unable to establish a leading position in online. The
closure of language services could not be excluded and would have
to be discussed with the FCO.
There would be a very serious impact on the World Service's
audiences, its competitive position and the benefit it brings
to Britain:
— By 2004, the projected number of online users
would be reduced from 15 million to five million.
— The World Service would not be able to establish
the world's leading multilingual news portal and would lose first
mover advantage in key languages.
— A combination of cuts in output and failure to
invest would lead to a dramatic decline in the global radio audience.
— The audience among opinion formers would be particularly
affected because the WS would not be able to meet their need for
more business programming.
— There would be loss of competitive advantage in
key countries where competitors are focusing and expanding their
efforts: Balkans, Iran, Indonesia.
— Against a background of a severe reduction in
capital Grant in Aid baselines since 1996, the World Service would
be unable to finance the next phase of overseas transmitter refurbishment,
putting global short wave distribution capacity at serious risk
with a substantial impact on audiences.
— The World Service has demonstrated clearly that
it delivers, and that it can retain and develop its leading position
in the world at a time of vastly increased competition through
focused and strategic developments. If these developments did
not occur, the World Service would be standing still, unable to
respond effectively to the dramatic changes in competition, technology
and audience need.
QUESTION 3: THE
EFFECTS OF
BBC RESTRUCTURING ON
THE WORLD
SERVICE; CHANGES
AT THE
WORLD SERVICE
PLANNED BY
THE NEW
DG; INDEPENDENCE OF
THE WORLD
SERVICE WITHIN
THE BBC
The World Service is not affected by the restructuring of
the BBC announced by the Director-General in April and there are
no changes planned at the World Service by the Director-General.
The title "Chief Executive World Service" has been
changed to "Director World Service" as part of a general
change to the Chief Executive title within the BBC. The Director
remains a full member of the BBC Executive Committee.
The World Service's independence within the BBC is secure,
in that the World Service ensures it provides the services required
for its own audiences and that Grant in Aid is used for World
Service purposes alone. Close co-operation and collaboration takes
place with other areas of the BBC to the benefit of the World
Service and to ensure a coherent BBC-wide global strategy, eg
in technology developments, research, partnerships and marketing.
QUESTION 4: THE
FUTURE OF
BUSH HOUSE
The World Service occupies Bush House under a lease which
expires in 2005.
In 1999 the World Service undertook a property needs analysis
which identified the form of accommodation which will be required
in the digital age.
Based on this analysis, a number of options have been identified
as part of a wider review of the BBC's overall property strategy
in London.
The BBC Governors have been considering the options and a
final decision is expected in the early summer.
Any decision taken will fully protect the management autonomy
of the World Service within the wider BBC while seeking to maximise
the opportunities for cost-effective, collaborative working arrangements
between the World Service and its BBC supplier departments.
QUESTION 5: LEEWAY
FOR FUNDING
TO RESPOND
TO NEW
REGIONAL CRISES
BBC World Service, like all publicly funded bodies, is unable
to carry significant contingency budgets. Consequently, the response
to regional crises must be met on an ad hoc basis from existing
funds.
One example is the 1999 Kosovo conflict when the World Service
significantly reprioritised its own operating expenditure to cope
with the required increase in output. However, this still left
a deficit of c£1 million, which was discussed with the FCO.
We were grateful for the very positive way they handled the problem,
in particular that they provided an in-year increase in Grant
in Aid of £0.5 million and agreed a vire from existing capital
of £0.5 million.
QUESTION 6: HOW
DOES THE
WORLD SERVICE
PLAN TO
MEET THE
EFFICIENCY SAVINGS
OF 7 PER
CENT (£25 MILLION)?
WHAT IMPACT
WILL THESE
SAVINGS HAVE?
Details of the efficiency savings are given in the table
below taken from the World Service 1999-2002 Three Year Plan.
|
| 1998-99 £000
| 1999-00 £000 |
2000-01 £000 | 2001-02 £000
| Total
£000
|
|
| World Service cost base @ 31 March 1999 |
154,996 | |
| | |
| Annual savings targets | |
(4,700) | (3,650)
| (3,250) | |
| Cumulative targets | | (4,700)
| (8,350) | (11,600)
| (24,650) |
| Percentage total | |
| | 7.5% |
|
|
The savings will be achieved through:
— Efficiencies from BBC supplier directorates made
possible by the 1996 restructuring;
— Internal World Service efficiencies from a variety
of sources, such as more efficient programme production, improved
purchasing and reductions in administrative costs;
— Redirecting resources from less productive activities
into investment in Online, FM and the new English network.
These savings targets are extremely challenging, especially
in language service operations, but they are being achieved without
adversely affecting quality.
Eighty eight per cent of World Service spend is focused on
programme activity—significantly higher than the BBC-wide
figure (76 per cent).
QUESTION 7: THE
WORLD SERVICE'S
PERFORMANCE AGAINST
TARGETS
Global audience target: the World Service has achieved
its highest ever audience figure—151 million weekly listeners
across the world. The target was 147 million.
High qualitative figures for trust have been achieved across
the world, demonstrated through independent surveys.
Online usage has tripled year on year.
The World Service is in the process of finalising its detailed
report on Output and Performance Measures, which will be given
to the FCO on 12 May. A copy will immediately be sent to the Foreign
Affairs Committee.
QUESTION 9: PLANNED
MAJOR ONLINE
DEVELOPMENTS
The World Service must establish the world's most extensive
multilingual audio news portal. We will provide three categories
of online news sites: full multimedia, 24-hour audio updates,
and audio bulletins.
1. Full multimedia
Full Multimedia: 24-hour continuously updated
multimedia news including audio, text, graphics and video.
Languages: English, Arabic, Chinese, Spanish,
Russian, Hindi, Persian, Portuguese, Indonesian.
2. 24-hour continuously updated on-demand audio
Customised online audio bulletins updated 24 hours a day
with comprehensive text
Languages: Ten language sites, including: Urdu,
Bengali, Czech, Hungarian, Thai, Ukrainian.
3. Audio only
Languages: 24 remaining languages—all available
anywhere in the world via the Internet
Features:
— Audio news bulletins as broadcast on radio updated
at least twice daily.
World Service Online is funded through:
(a) additional resources provided in the Comprehensive
Spending Review 1998; but, because these alone were not sufficient,
also through;
(b) a range of efficiency and reprioritisation measures,
including the closure of the German Service in 1999. Without these
measures, the necessary initial online investments could not have
been made.
However, the Internet is now growing much faster than we
predicted even a year ago. More than 300 million use the internet
across the world today; more than 500 million will be connected
by 2003-04. It is therefore essential for the World Service to
accelerate its online investments now, as highlighted on the previous
pages.
QUESTION 10: HOW
IS THE
WORLD SERVICE
PRESENCE ON
FM PROGRESSING; IS
IT HAPPENING
AT THE
EXPENSE OF
SHORT WAVE?
Over the past year, the World Service has increased its presence
on FM in capital cities from 92 to 110, including Mexico City,
Buenos Aires and Khartoum.
This expansion of FM broadcasts is not happening at the expense
of short wave, which remains a critical delivery platform for
millions of people around the globe. The graph illustrates how
each delivery platform is likely to develop over the next five
years, with short wave, although in decline, still providing the
vast majority of the audience.
The reality is that the World Service must expand its FM
presence but also retain a strong short wave distribution capability
across the world. That is why we are now investing in a new transmitter
operation in Oman, which will sustain short wave capability across
the Gulf and much of South Asia for the next 20 years.
QUESTION 11: CHANGES
FOLLOWING THE
MEMORANDUM OF
UNDERSTANDING BETWEEN
THE BBC WORLD
SERVICE AND
THE BRITISH
COUNCIL
The Memorandum of Understanding is a new framework for increased
co-operation between the British Council and BBC World Service.
Its purpose is to:
— share agendas in areas of common interest;
— pool resources and expertise where appropriate;
— maximise impact through working in partnership;
— utilise existing global networks to mutual advantage
and benefit;
— improve the integration of related activities;
— share knowledge and ideas to develop new products
and services;
— capitalise on the status, experience and credibility
of both organisations;
Co-operation between the British Council and the BBC World
Service is now more co-ordinated than in the past. Currently 34
joint initiatives are taking place, ranging from the "Teachers
in Action" project in sub-Saharan Africa to the "Millennium
English" language learning site on the Internet.
The Director of the World Service and the Director-General
of the British Council now meet on a quarterly basis to assess
and review progress.
The World Service is content with the level of management
autonomy it has from the rest of the BBC.
QUESTION 12: THE
MARKETING STRATEGY
OF BBC MONITORING;
PERCENTAGE OF
INCOME FROM
NON-GOVERNMENTAL
SOURCES OVER
THE NEXT
FIVE YEARS
Monitoring's marketing strategy is likely to remain rooted
around its services to its stakeholder customers, the FCO, the
MoD, the Cabinet Office and the BBC, with an emphasis on developing
the range and value of services to them. However, efforts will
continue to grow income from other sources, from its current level
of some 10 per cent of gross costs, to around 15 per cent, as
the market for Monitoring's specialist information continues to
develop. Some of this growth may come from other Government customers
not currently involved as stakeholders, as the need for the coherent
management of information across Government develops rapidly.
|
