BBC Commercial Operations - Culture, Media and Sport Committee Contents

9  Conclusion

112. There are major benefits from the BBC undertaking commercial activities. Most importantly, the profits generated by the exploitation of the BBC's intellectual property can be reinvested in the BBC's public services, to the benefit of licence fee payers. We fully support this principle. However, the manner in which some of the BBC's commercial revenue is generated, and the governance arrangements within which the BBC's commercial arm—BBC Worldwide—operates, cause us and others increasing concern. Worldwide has proved successful in recent years in exploiting new commercial opportunities. Its expansion was largely made possible by a loosening of the rules that govern the limits to its operations. However, there is clearly a balance to be drawn, between Worldwide generating a return for the BBC, and limiting Worldwide's operations in order to ensure it upholds the BBC's reputation and does not damage its commercial competitors.

113. The new businesses in which Worldwide has become involved, particularly its minority stakes in overseas production companies, its controversial acquisition of Lonely Planet, and its growing portfolio of magazines, suggest that the balance has been tipped too far in favour of Worldwide's unrestricted expansion. Worldwide's new activities risk jeopardising the reputation of the BBC and have had an adverse impact on its commercial competitors. Furthermore, it seems likely that the BBC could gain a better return for the licence fee payer if it sold more of its rights on the open market rather than offering them exclusively to Worldwide. We believe it is in the interests of the UK's creative economy as a whole that BBC Worldwide's activities are reined back. Among our other recommendations, we therefore recommend that the BBC Trust reinstates the rule that all BBC commercial activity must have a clear link with core BBC programming.

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