Post by Teddy Bear on Jul 18, 2008 19:13:41 GMT
About time too!
BBC's commercial activities face investigation
By Nicole Martin, Digital and Media Correspondent
Last Updated: 6:42PM BST 18/07/2008
The BBC is facing an investigation by a powerful group of MPs to establish whether its commercial activities are distorting the market.
The inquiry by the House of Commons culture, media and sport select committee follows complaints that the corporation's commercial operations are stifling competition and hurting private-sector rivals.
The committee will principally look at the activities of BBC Worldwide, the BBC's money-making arm, whose profits soared to £118 million last year.
Mark Thompson, the BBC director- general, said recently that the commercial arm had a duty to maximise profits to reinvest in programming, but rivals have accused it of trampling over their interests.
The committee will investigate the entirety of Worldwide's activities, from its magazine and DVD businesses, to its international sales of programmes such as Dr Who, Top Gear and Strictly Come Dancing.
It will call John Smith, the chief executive of BBC Worldwide, to justify its acquisition of the Lonely Planet travel guides, which drew criticism from the guides' rival, Time Out.
It will also examine the international version of the BBC's website, bbc.com, which has been criticised for carrying adverts from companies such as Rolex. Plans for a video-on-demand service offering more than 10,000 hours of TV programming will also face scrutiny.
The project, known as Kangaroo, is to be a joint venture between BBC Worldwide, Channel 4 and ITV, offering recently aired shows as well as older archive programmes.
However, some rival broadcasters, including BSkyB, have complained that its launch threatens to skew the market.
BBC Worldwide also raised eyebrows recently when it struck a multi-million pound with Jeremy Clarkson to promote Top Gear internationally.
Critics claim that this was further evidence of the BBC submitting to the wages demands of popular presenters and distorting competition.
John Whittingdale, the committee's chairman, said he had been inundated with complaints from public companies about the BBC's commercial activities.
"There has been a huge clamour of complaints about the effects the BBC's commercial operations are having on the private sector," he said.
"This inquiry will be looking to find out whether those activities are justified. Why did they buy Lonely Planet? Why does bbc.com have to carry adverts? These are the questions that John Smith and Mark Thompson will have to answer."
Mr Whittingdale said the committee would also investigate the BBC's UK website, bbc.co.uk, following complaints from rivals that it is monopolising the internet.
It will also quiz the corporation over plans to broaden the reach of its website by spending £68 million over the next five years on more localised news services for people across the country.
The proposals have already been roundly condemned by cash-strapped regional newspaper owners who fear that the BBC will take readers away from their sites.
A spokesman for the BBC Trust, the corporation's governing body, said: "The Trust notes the CMS Select Committee's inquiry into the commercial operations of the BBC and looks forward to participating fully with the process, as will other representatives of the BBC."
The committee is inviting interested parties to submit evidence by October.
It will then invite people to give evidence in person before publishing its final report early next year.
By Nicole Martin, Digital and Media Correspondent
Last Updated: 6:42PM BST 18/07/2008
The BBC is facing an investigation by a powerful group of MPs to establish whether its commercial activities are distorting the market.
The inquiry by the House of Commons culture, media and sport select committee follows complaints that the corporation's commercial operations are stifling competition and hurting private-sector rivals.
The committee will principally look at the activities of BBC Worldwide, the BBC's money-making arm, whose profits soared to £118 million last year.
Mark Thompson, the BBC director- general, said recently that the commercial arm had a duty to maximise profits to reinvest in programming, but rivals have accused it of trampling over their interests.
The committee will investigate the entirety of Worldwide's activities, from its magazine and DVD businesses, to its international sales of programmes such as Dr Who, Top Gear and Strictly Come Dancing.
It will call John Smith, the chief executive of BBC Worldwide, to justify its acquisition of the Lonely Planet travel guides, which drew criticism from the guides' rival, Time Out.
It will also examine the international version of the BBC's website, bbc.com, which has been criticised for carrying adverts from companies such as Rolex. Plans for a video-on-demand service offering more than 10,000 hours of TV programming will also face scrutiny.
The project, known as Kangaroo, is to be a joint venture between BBC Worldwide, Channel 4 and ITV, offering recently aired shows as well as older archive programmes.
However, some rival broadcasters, including BSkyB, have complained that its launch threatens to skew the market.
BBC Worldwide also raised eyebrows recently when it struck a multi-million pound with Jeremy Clarkson to promote Top Gear internationally.
Critics claim that this was further evidence of the BBC submitting to the wages demands of popular presenters and distorting competition.
John Whittingdale, the committee's chairman, said he had been inundated with complaints from public companies about the BBC's commercial activities.
"There has been a huge clamour of complaints about the effects the BBC's commercial operations are having on the private sector," he said.
"This inquiry will be looking to find out whether those activities are justified. Why did they buy Lonely Planet? Why does bbc.com have to carry adverts? These are the questions that John Smith and Mark Thompson will have to answer."
Mr Whittingdale said the committee would also investigate the BBC's UK website, bbc.co.uk, following complaints from rivals that it is monopolising the internet.
It will also quiz the corporation over plans to broaden the reach of its website by spending £68 million over the next five years on more localised news services for people across the country.
The proposals have already been roundly condemned by cash-strapped regional newspaper owners who fear that the BBC will take readers away from their sites.
A spokesman for the BBC Trust, the corporation's governing body, said: "The Trust notes the CMS Select Committee's inquiry into the commercial operations of the BBC and looks forward to participating fully with the process, as will other representatives of the BBC."
The committee is inviting interested parties to submit evidence by October.
It will then invite people to give evidence in person before publishing its final report early next year.