Post by Teddy Bear on Sept 12, 2008 20:52:04 GMT
Rivals want limits set on Worldwide arm of BBC
Last Updated: 11:58pm BST 07/09/2008
BBC Worldwide chief executive John Smith faced something of a conundrum last year. The corporation's commercial arm had ambitious plans to bring the Top Gear brand to the world, through magazines, websites, foreign remakes and live events. Then noises stage left suggested its star, Jeremy Clarkson, was being wooed by ITV and American Idol creator Simon Fuller.
So Clarkson was given a share in the brand's international revenues through a joint venture company with Worldwide. Accounts filed last week show that, over five months, he earned £327,000, on top of his presenter's salary.
For its part, Worldwide collected just over £1m in dividend payments and distribution fees, and £900,000 is going to the public service arm of the BBC for the right to exploit the motoring show.
Clearly a good deal for the corporation. But the use of Worldwide to boost the income of a presenter will draw fresh accusations that the BBC media gorilla is providing unfair competition to private businesses.
In recent weeks, characters as diverse as Gerhard Zeiler, chief executive of European broadcaster RTL, and Time Out publisher Tony Elliott have expressed disquiet about the expansion of Worldwide.
Tasked with doubling profits to £200m by 2012, Mr Smith has overseen its expansion into travel guide publishing, with the acquisition of a 75pc share of Lonely Planet, the launch of dozens of overseas channels, the acquisition of 25pc stakes in independent production companies in Australia, Russia, Canada and the UK, and in-house production teams in the US, Germany, India and France.
Commercial activities not only provoke accusations of market distortion, they can create conflicts of interest for the public service arm. The non-commercial BBC website frequently links to Lonely Planet's site, but is meant to do so on a non-discriminatory basis.
This is not always followed through, and last week the BBC was forced to make changes to its website after The Daily Telegraph pointed out that preference had been given to Lonely Planet several times.
Parliament's influential Culture select committee is conducting an inquiry into the BBC's commercial activities later this year. One of its main themes is likely to be whether clearer limits need to be imposed on Worldwide.
John McVay, chief executive of the independent producers' association Pact, said: "Worldwide seems to have no boundaries to the scope of what it will do. That makes it very hard for privately-owned companies driven by profitability and shareholders to decide to go into a market for fear the BBC will park its tanks on that lawn."
Pact believes in a licence fee- funded BBC, and recognises that principle is likely to need defending when the current £3bn a year settlement expires in 2016.
Worldwide is the Corporation's insurance policy against any reduction in public funding, and the determination to increase its contribution to BBC programme budgets must be seen in that context.
But Worldwide's moves to ensure its financial future have increasingly brought it into conflict with the independent production sector.
Since British "indies" were given control of their intellectual property in 2003, they can derive bigger profits from their shows than the broadcasters who commission them.
As a result, there is pressure on Worldwide's primary source of income as the biggest exporter of UK programmes to foreign broadcasters. The BBC in-house product is being replaced by shows produced by independents, but the largest of these now have their own programme sales teams.
"We are not out to crush anyone," said Worldwide content and production director Wayne Garvie. The real threat, he contends, is from international broadcasters moving into the UK and foreign-owned "'super-indies" such as Endemol, IMG and Fremantle Media.
"There is one British company that can play on the world stage and that is BBC Worldwide," said Mr Garvie. "If we are not careful, a lot of British companies will end up in the hands of foreign broadcasters."
Andy Harries spent over a decade at Granada producing some of its best shows, from Prime Suspect to The Royle Family. He left last year to set up his own company, Left Bank Pictures, in which BBC Worldwide took a 25pc stake.
He too sees "super-indies" as the enemy. "The one group that did not come and make me an offer when I was looking for investment were so-called independent production companies. They do not want to help potential future rivals."
The stake in Left Bank Pictures is not altruistic - it is the beginning of a solution to Worldwide's export problem, because the BBC has first refusal on the right to sell on the producer's work. Said Mr Harries: "Worldwide have had to go to people like me to ensure their supply line is built back up."
Meanwhile, independents have made it clear they want an end to Worldwide's first refusal on export sales or remakes of BBC-owned shows.
"It goes without saying that any international producer or distributor would like equal access to the BBC's terrific output," said Fremantle chief executive Tony Cohen.
Another move which could boost the Worldwide supply line is a widely rumoured agreement with BBC drama supremo Jane Tranter. She is supposedly ready to set up a drama unit for Worldwide in Los Angeles, pitching her into conflict with home-grown companies such as Elisabeth Murdoch's Shine, RDF and All3Media that have already moved into the American market.
From the publishing sector, the biggest concern is the acquisition of Lonely Planet, and forthcoming plans to revamp its website and launch a Lonely Planet magazine.
Time Out publisher Tony Elliott, who owns his own successful travel guides, is organising meetings with others in his sector, including Condé Nast and Penguin, to co-ordinate their response to the select committee inquiry. He will also make his case to the Corporation's regulator, the BBC Trust.
Elliott said: "The BBC Trust really hasn't got a grip on this - it's slithering around out of control. BBC Worldwide needs to be pruned and restructured."
Clearly there are some outside the BBC who do profit from Worldwide's expansion - any would-be pruners should think carefully before taking on the formidable Clarkson.
Last Updated: 11:58pm BST 07/09/2008
BBC Worldwide chief executive John Smith faced something of a conundrum last year. The corporation's commercial arm had ambitious plans to bring the Top Gear brand to the world, through magazines, websites, foreign remakes and live events. Then noises stage left suggested its star, Jeremy Clarkson, was being wooed by ITV and American Idol creator Simon Fuller.
So Clarkson was given a share in the brand's international revenues through a joint venture company with Worldwide. Accounts filed last week show that, over five months, he earned £327,000, on top of his presenter's salary.
For its part, Worldwide collected just over £1m in dividend payments and distribution fees, and £900,000 is going to the public service arm of the BBC for the right to exploit the motoring show.
Clearly a good deal for the corporation. But the use of Worldwide to boost the income of a presenter will draw fresh accusations that the BBC media gorilla is providing unfair competition to private businesses.
In recent weeks, characters as diverse as Gerhard Zeiler, chief executive of European broadcaster RTL, and Time Out publisher Tony Elliott have expressed disquiet about the expansion of Worldwide.
Tasked with doubling profits to £200m by 2012, Mr Smith has overseen its expansion into travel guide publishing, with the acquisition of a 75pc share of Lonely Planet, the launch of dozens of overseas channels, the acquisition of 25pc stakes in independent production companies in Australia, Russia, Canada and the UK, and in-house production teams in the US, Germany, India and France.
Commercial activities not only provoke accusations of market distortion, they can create conflicts of interest for the public service arm. The non-commercial BBC website frequently links to Lonely Planet's site, but is meant to do so on a non-discriminatory basis.
This is not always followed through, and last week the BBC was forced to make changes to its website after The Daily Telegraph pointed out that preference had been given to Lonely Planet several times.
Parliament's influential Culture select committee is conducting an inquiry into the BBC's commercial activities later this year. One of its main themes is likely to be whether clearer limits need to be imposed on Worldwide.
John McVay, chief executive of the independent producers' association Pact, said: "Worldwide seems to have no boundaries to the scope of what it will do. That makes it very hard for privately-owned companies driven by profitability and shareholders to decide to go into a market for fear the BBC will park its tanks on that lawn."
Pact believes in a licence fee- funded BBC, and recognises that principle is likely to need defending when the current £3bn a year settlement expires in 2016.
Worldwide is the Corporation's insurance policy against any reduction in public funding, and the determination to increase its contribution to BBC programme budgets must be seen in that context.
But Worldwide's moves to ensure its financial future have increasingly brought it into conflict with the independent production sector.
Since British "indies" were given control of their intellectual property in 2003, they can derive bigger profits from their shows than the broadcasters who commission them.
As a result, there is pressure on Worldwide's primary source of income as the biggest exporter of UK programmes to foreign broadcasters. The BBC in-house product is being replaced by shows produced by independents, but the largest of these now have their own programme sales teams.
"We are not out to crush anyone," said Worldwide content and production director Wayne Garvie. The real threat, he contends, is from international broadcasters moving into the UK and foreign-owned "'super-indies" such as Endemol, IMG and Fremantle Media.
"There is one British company that can play on the world stage and that is BBC Worldwide," said Mr Garvie. "If we are not careful, a lot of British companies will end up in the hands of foreign broadcasters."
Andy Harries spent over a decade at Granada producing some of its best shows, from Prime Suspect to The Royle Family. He left last year to set up his own company, Left Bank Pictures, in which BBC Worldwide took a 25pc stake.
He too sees "super-indies" as the enemy. "The one group that did not come and make me an offer when I was looking for investment were so-called independent production companies. They do not want to help potential future rivals."
The stake in Left Bank Pictures is not altruistic - it is the beginning of a solution to Worldwide's export problem, because the BBC has first refusal on the right to sell on the producer's work. Said Mr Harries: "Worldwide have had to go to people like me to ensure their supply line is built back up."
Meanwhile, independents have made it clear they want an end to Worldwide's first refusal on export sales or remakes of BBC-owned shows.
"It goes without saying that any international producer or distributor would like equal access to the BBC's terrific output," said Fremantle chief executive Tony Cohen.
Another move which could boost the Worldwide supply line is a widely rumoured agreement with BBC drama supremo Jane Tranter. She is supposedly ready to set up a drama unit for Worldwide in Los Angeles, pitching her into conflict with home-grown companies such as Elisabeth Murdoch's Shine, RDF and All3Media that have already moved into the American market.
From the publishing sector, the biggest concern is the acquisition of Lonely Planet, and forthcoming plans to revamp its website and launch a Lonely Planet magazine.
Time Out publisher Tony Elliott, who owns his own successful travel guides, is organising meetings with others in his sector, including Condé Nast and Penguin, to co-ordinate their response to the select committee inquiry. He will also make his case to the Corporation's regulator, the BBC Trust.
Elliott said: "The BBC Trust really hasn't got a grip on this - it's slithering around out of control. BBC Worldwide needs to be pruned and restructured."
Clearly there are some outside the BBC who do profit from Worldwide's expansion - any would-be pruners should think carefully before taking on the formidable Clarkson.