BBC's commercial arm eyes expansion to match global rivals

Reuters

By Belinda Goldsmith

LONDON, Oct 18 (Reuters) - BBC Worldwide, the commercial armof Britain's public broadcaster, unveiled a three-pronged planon Friday to expand globally by boosting spending on TV content,strengthening its online site, and launching three new channelbrands.

Tim Davie, who took over as head of BBC Worldwide in April,said BBC Worldwide had too many different websites and digitalpropositions, saying there needed to be a greater focus andscale to compete with global rivals, such Hulu, Netflix and Amazon, owner of LoveFilm.

Davie outlined plans to increase spending on content by 30million pounds ($48.56 million) a year to about 200 millionpounds, announcing a new drama series, "Intruders", from thewriter of "The X-Files".

He said the launch of three new channel brands focused onnatural history, drama and "male audiences" would help promoteBBC content to international audiences in different formats fromstandalone TV channels to online offerings.

One of these new channels, BBC First, will launch first inAustralia on the pay-TV Foxtel platform next August.

The third prong of the strategy involved scrapping a globaliPlayer app launched in 2011 and instead strengthening international online site BBC.com to help the BBC meet itstarget to double its global reach to 500 million people by 2022.

BBC Worldwide's increased ambitions come as the BBC facescriticism over whether it is giving value to the British publicafter paying large severance packages to departing managers andscrapping a 100 million pound digital media project.

Davie said the new investments would enable BBC Worldwide togrow internationally via its own services and third party sales,and raise more revenue.

"(This will result) in greater access by audiences to BBCand British content and sustainable cash flows back to the BBC,"Davie said in a statement.

BBC Worldwide posted sales of about 1.1 billion pounds($1.78 billion) in 2012/013 and returned 156 million pounds tothe public service broadcaster that is funded largely by licencefees paid by all British households with a television.

Last week, Tony Hall, director general of the BBC, theworld's largest state-funded broadcaster, said the organisationhad to cut costs by 20 percent by 2017 but also needed to findan additional 100 million pounds a year in savings to invest inthe future.

Davie said the three-pronged plan for BBC Worldwide was aneffort to make the BBC truly global.

"They combine an increased commitment to content investmentwith new BBC content brands alongside a more powerful andunified digital engine," he said.

Analysts said it made sense to simplify the way BBCWorldwide reached its audience by focusing on BBC.com.

"It all seems to make sense but there are underlyingquestions about whether BBC Worldwide should be investing in itsown productions or seeking to return the maximum possible amountto licence fee payers," said Steve Hewlett, a media analyst andformer executive with broadcaster ITV.

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