Beeb.com, the commercial online publishing arm of the BBC, has finally committed to launching its own free Internet access service Â-two years after quietly scrapping original plans to operate as a paid-for ISP.
Last week, the company has announced it is joining Demon Internet owner Scottish Telecom to launch a free ISP service, FreeBeeb.net, later this summer.
Beeb.com director Rupert Miles says the deal allows Beeb.com to fulfil its original ambition of operating as a direct ISP as well as Website operator, while avoiding the financial risks of heavy marketing spend and infrastructural costs which were widespread when it first launched.
And he denies it’s too late for FreeBeeb.net to secure substantial market share amid the proliferation of free and paid-for ISP brands.
“There remains a significant opportunity,” says Miles. “There’s a ‘first mover’ advantage, but look at the growing number of PC homes which still aren’t connected to the Internet. There are plenty of people out there who may be able to access FreeBeeb.net, and despite having two or three free ISP CD-Roms thrown at them in the past few months, still haven’t opted for existing rivals. It’s not a closing group, but a growing market Â which still offers huge potential.”
FreeBeeb.net will be promoted through BBC Magazines’ stable of titles. This “in-house” marketing campaign will probably centre on print ads carrying a freephone number for readers to apply for an installation CD-Rom through the post, rather than BBC Magazines carrying covermounts.
Beeb.com is also examining ways of promoting the service in other print titles and through high street stores. The service will not be marketed on the BBC’s television services, emphasises Miles, as this would be viewed as inappropriate promotion of a commercial, profit-seeking venture.
By finally launching as a free “virtual” ISP, with Scottish Telecom providing the infrastructural backbone, Beeb.com hopes to profit from boosted traffic on its site at a fraction of the financial risk originally envisaged when the venture planned an ISP service.
“Launching a paid-for ISP was part of the original deal we struck with our partners ICL when Beeb.com was launched,” he says. “But at the time, it was clear that the ISP was going to become commoditised, while at the same time the marketing costs were becoming enormous Â with speculation that AOL was spending $100 (£61.70) on acquiring each new subscriber. We were nervous about the cost of marketing, and financing the infrastructure.”
But with the business model for ISPs now turned on its head, the BBC’s commercial arm is better placed to launch in the market.
“The revenue cut in interconnectivity charges now available from telcos can be quite significant if people stay on your site for a long time,” says Miles.
“Beeb.com is well placed on this model, because we have created a sizeable site.
“What we can do now is launch an ISP with a lot less financial risk than two or three years ago, based on a proven business model Â it would be churlish not to take the opportunity.”