BBC Breaks Tradition, Opens Books

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London -- The British Broadcasting Corp. broke 75 years of
tradition and issued an "open" set of financial results for its latest fiscal
year as if it were in private hands, and not the government's hands.

But maybe that's only natural: Its BBC Worldwide
commercial arm is already treated as a stand-alone business, and it claimed that its sales
are growing faster than the overall market in all key areas of activity.

The BBC already pulls in $3 billion annually from a
$156-per-year license fee paid by each household in the United Kingdom. Director general
Sir John Birt is seeking a fourfold increase in BBC Worldwide's profits over the next
seven years.

In the fiscal year ended March 31, BBC Worldwide generated
some $650 million in revenue, up 16 percent from the previous year, largely from overseas
sales of TV shows, publishing and licensing and merchandising of its on-screen characters.

Its profit margin was a thin 3.4 percent, or $22.4 million
-- "doubled" from the previous year, according to the report. Closer inspection
showed that had it not been for a one-time sale of BBC Worldwide's 3.8 million shares
in pay TV programmer Flextech plc, worth $33 million, the company would have posted a
loss.

As it is, BBC Worldwide turned a 1997 operating profit of
$8.3 million into a loss of $11.52 million last year. The report showed that costs
associated with setting up a worldwide programming joint venture with Discovery
Communications Inc. totaled $8.3 million.

To be sure, BBC Worldwide is never likely to make large
profits, its task being to plow funds back into the coffers of the BBC.

Consequently, on the upside during the year, BBC Worldwide
itself invested $80 million in BBC programming; it sealed the Discovery and Flextech
partnership deals; it saw the BBC America and Discovery joint ventures People + Arts and
Animal Planet launch; and it has taken full control of the BBC World (news) and BBC Prime
(entertainment) channels.

BBC Prime, distributed by satellite and cable throughout
Europe, reported 6.3 million subscribers, while BBC World can be seen by some 33 million
homes in Europe and another 10 million in South Asia.

The BBC said this year that it has plans to secure 24-hour
distribution for BBC World in the United States, "and to strengthen its position in
Japan and Asia."

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