GUARDIAN
ONLINE ARTICLES,
14 AND 25 FEBRUARY
2009
BBC must axe business ventures, insist MPs, Gaby
Hinsliff and James Robinson, 14 February
The BBC is braced for fresh controversy over
its use of the licence fee, with a hard-hitting report from senior
MPs set to recommend that its commercial activities be sharply
curtailed.
The Commons Culture, Media and Sport Committee
is expected to recommend that BBC Worldwide, the Corporation's
business arm, should return to its original function of making
money out of BBC programmes and spin-off products. Smaller rivals,
particularly in magazine publishing, have accused the BBC of abusing
its state-funded position to snap up businesses which have no
link to its output—such as the travel guide business Lonely
Planet—or launch ventures like the food magazine, Olive,
which might squeeze others out of the market.
Sources close to the Committee, which is now
finalising its report for publication this month, said there was
a "big question mark" over the sea change that had taken
place in the last few years, as the BBC "abandoned the pretence"
that Worldwide's activities were directly linked to programmes.
Last night there were signs that the BBC was moving to put its
house in order ahead of the report's findings as it emerged that
BBC Worldwide had quietly ditched a controversial website set
up last year to offer advice and information about the environment.
Insiders said BBC Green had been shut down because
it was likely to be criticised by the BBC Trust. The closure casts
doubt on an ambitious plan to launch four similar, advertising-funded
"portals" covering subjects including parenting, the
countryside and sport this year. It is thought they may now be
postponed indefinitely, although a spokeswoman for BBC Worldwide
insisted they could still go ahead.
The spokeswoman said BBC Worldwide had shut
down BBC Green, which was funded by advertising, for commercial
reasons, adding: "We are a commercial business and in difficult
times we have to look at our portfolio". Unlike sites such
as topgear.com and gardenersworld.com, which use material generated
from and linked to its programmes, BBC Green covered environmental
issues rather than being linked to a specific show.
The Select Committee report is expected to argue
that it is right for BBC Worldwide, which made £112 million
last year, to maximise profits for the benefit of licence-fee
payers through activities such as selling the rights to programmes
overseas or developing magazines and merchandise, but that it
should not be allowed to distort the market.
MPs have also been concerned by complaints from
local newspapers that the BBC's decision to set up news websites
linked to its local news bulletins were driving them out of business.
Criticism of BBC Worldwide has intensified as the recession reduces
the pool of advertising from which rival publishers are now drawing
revenue.
The BBC Trust chairman Sir Michael Lyons hinted
last year that Worldwide had gone too far, saying trustees were
"of the view that [it] needs to be modestly contained".
MPs' report expected to question BBC and channel
4 linkup, Mark Sweney, 25 February
A BBC partnership with Channel 4 would be damaging
for the industry, making BBC Worldwide too commercially "aggressive",
says a leaked parliamentary report. The draft House of Commons
Culture, Media and Sport Select Committee report examining BBC
Worldwide's activities expresses scepticism about a merger.
"There is a danger that it would make [BBC]
Worldwide even more aggressively commercial", states a draft
report seen by MediaGuardian.co.uk. "Channel 4 has no programmes
of its own to distribute, so it is questionable what it would
bring to the deal".
The draft report also raises concerns that if
BBC Worldwide's profits of more than £100 million a year
are pumped into a Channel 4 joint venture there would be "implications
for either the level of the licence fee or the quality of the
BBC's service".
Communications minister Lord Carter last month
outlined the framework for a new public service broadcasting entity,
with Channel 4 at its heart, to plug a funding gap of more than
£100 million a year the broadcaster says it will face by
2012. Carter's interim Digital Britain report stated that
the preferred option is a tie-up with BBC Worldwide, but wider
partnerships including a potential deal with RTL-owned Channel
Five have not been taken off the table.
Overall, the draft report expresses concern
over BBC Worldwide's expansion, noting that its investment strategy
has not always been "programme-related, logical, without
adverse impact on commercial competitors, or risk-free uses of
public money".
BBC Worldwide has been criticised for investments
such as buying a 75% stake in guidebook publisher Lonely Planet.
The draft report argues that the commercial criteria that BBC
Worldwide uses to make a case for investment are "vague and
too easy for the BBC to interpret in its own favour".
It recommends a tightening of the criteria to
make clear the link between all commercial activity and core BBC
programming. It also suggests that BBC Trust approval, which is
necessary only for investments above £50 million, be required
at a significantly lower level.
In relation to programme sales, the draft report
concludes that there is "little evidence" to show that
the BBC is "currently obtaining the maximum value from its
programming" through the "first look" arrangement
with BBC Worldwide. The committee recommends an increase in transparency
and opening of the market. The draft report questions whether
it is justified for BBC Worldwide to take a stake in production
companies.
It also argues that there is "no reason
in principle" why the BBC should produce its own magazines
in-house, other than the Radio Times, and that its presence in
the sector has been detrimental to commercial publishers.
The report argues that the rights to the BBC's
existing magazines should be "gradually sold off" to
commercial publishers. The BBC would retain the right to take
them back in-house only if certain editorial standards were not
upheld. New titles should only be launched if there was a "clear
link" with core BBC programming and if they had passed a
public value test. The Culture Select Committee, which is chaired
by Tory MP John Whittingdale, is likely to ratify the final draft
on 6 March.
"We will be interested to see the report
in due course and the BBC will make due response then", said
a spokeswoman for BBC Worldwide.
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