The long-awaited review of the BBC’s commercial arm – BBC Worldwide – is due to be unveiled this week, and with it an expected reprieve from privatisation.
According to industry speculation, the review, instigated by director general Greg Dyke last summer, is also likely to rule out privatisation for its subsidiary businesses, including magazine publishing.
But partnerships between BBC Worldwide’s subsidiaries, such as magazines and outside commercial operations, are likely to be actively encouraged. It is not clear what form such partnerships will take. Some industry pundits speculate that magazines such as Radio Times and the Good Food Magazine could be partially hived off to the private sector through commercial joint venture publishing.
What is certain, however, is that a new structure for BBC Worldwide’s magazine, video, book and audio publishing operations will be unveiled which will ditch the genre-specific divisions (sport, motoring and entertainment; Radio Times, arts and factual; lifestyle; and family) and replace them with product-related management units.
The widely-expected “format-driven” model has already claimed its first victim – managing director of BBC Worldwide UK Peter Teague, who was effectively responsible for all publishing operations.
The latest restructure is the third since December 1996 and will split the publishing division into magazines and consumer publishing, to include books, video and audio.
The BBC’s annual report, published last week, revealed that BBC Worldwide contributed £96m to the corporation’s coffers for the year ending April, on a turnover of £587m and profits of £23m. Money spinners for the BBC are the sale of international TV rights for programmes such as The Weakest Link and brands such as The Tweenies.
Under the new structure, Teague has been ear-marked for the post of managing director of consumer publishing. But Teague has made it clear that he will leave BBC Worldwide in March next year – a decision which insiders attribute to the restructure.
Peter Phippen, managing director of BBC Worldwide US and a former managing director of BBC Worldwide UK, will return to the UK to become managing director of magazines.
Phippen and Teague will report to BBC Worldwide chief executive Rupert Gavin.
The reorganisation of the BBC’s magazine division according to product type, rather than genre, is a far cry from the strategies of media giants such as EMAP and IPC Media. But will BBC Worldwide’s new structure enable it to work more effectively with advertisers and their agencies?
One press buyer says: “The question is not whether BBC Worldwide can successfully push its products into the market but whether advertisers will be ready to follow. The offerings of EMAP and IPC are still quite attractive to advertisers. It remains to be seen whether this time the BBC will finally be able to deliver.”
One press buyer claims the latest restructure is a step back for BBC Worldwide: “Now it wants to take the more traditional route of exploiting the strengths of the product rather than the brand. But it was not advertisers’ lack of interest in its brands, but BBC Worldwide’s inability to deliver [that instigated the restructure]. Its culture is not advertiser friendly.”
Simon Kippin, publisher of Glamour at CondÃ© Nast, is in favour of the move. “I applaud the move. It is a classic CondÃ© Nast tactic. I have been a great exponent of magazine brands rather than cross-media branding,” he adds.
A BBC Worldwide insider insists the new structure will not take focus away from brands, adding: “All we are doing is dumping what hasn’t worked for us. We are keeping some of the genres – such as the children’s genre, which has worked very well for us.”
The latest figures from the Audit Bureau of Circulations (ABC), for June to December 2000, show that sales of Radio Times, its biggest selling title, fell 5.4 per cent year on year to 1,264,315. Teen magazine Top of the Pops dropped 17.2 per cent year on year to 305,122 and BBC Gardeners’ World fell 3.4 per cent to 310,770.
Under the new structure, it is likely that the magazine division will have to think outside the natural TV programme extensions for launches. One example of a product-centric launch is Eve. But there are rumours that BBC Worldwide’s recent foray into the women’s monthly market is not as successful as it had hoped.
If BBC Worldwide is to increase the commercial activities of its publishing operations, and launch joint ventures with outside partners, private companies may have the opportunity to cash in on successful brands such as Radio Times, Top of the Pops and Good Food. Such money-spinning ideas are likely to re-open the debate over whether the BBC has a huge commercial advantage over rivals.
A BBC Worldwide insider laughs off the criticism and says that extending brands – whether TV into magazines or magazines into mast-head programming, as The National Magazine Company has attempted to do – is not easy.
BBC Worldwide’s exploitation of its TV links has provoked complaints from industry rivals. Objections, for example, have been raised about the use of trailers on BBC channels for women’s magazine Eve and Star, which was launched at the same time as a programme of the same name.
BBC’s fair-trading rules and commercial policies demand that the its public service role and commercial operations are kept separate, but rival publishers are always on the alert for any possible breach of the regulations. The pending government-commissioned report into the BBC’s commercial practices, due in a couple of weeks time, is expected to clear it of anti-competitive behaviour.
One press buyer adds: “It (BBC Worldwide) has never been very good with publishing magazines. Despite the fact that it has the might of TV and radio businesses, its circulation figures for some of its publications such as BBC History Magazine (50,082 in the last ABCs) are lacklustre.”
It remains to be seen whether BBC Worldwide’s new structure and emphasis on joint commercial ventures will make a difference to its performance. But as far as advertisers are concerned, things can only get better.