BBC has been advised to carry advertising on international versions of its public service Internet site, BBC Online, as one way of making money to fund the new era of digital television.
It was also told to pump private money into its commercial arm BBC Worldwide, which runs a revenue based Web site Beeb.com.
These were some of the recommendations of the Davies review panel, commissioned to look into the future of the BBC's funding, which released its report yesterday.
The panel toyed with the idea of recommending that the BBC carries advertising on BBC Online, thus turning it onto a fully commercial operation and possibly floating it on the stock market.
However, it was decided that as it is expected to become a core part of the company’s public service in the future, advertising would stunt its development as it would not be allowed to promote itself on BBC TV channels as it does now.
As around half of BBC Online's Web readers are outside the UK, the panel decided the most effective move would be to launch separate Online services, such as BBC Online America. It would then make money by receiving advertising and ecommerce revenues, where the UK version will continue to be funded by the license fee.
The BBC said it welcomed this recommendation, adding in a statement, “We are actively exploring ways of making Online separately available to international Internet users. These include deals with US portal sites to host BBC Online content and mirror sites taking advertising.”
The amount of non license fee paying visitors taking advantage of BBC Online was just one of the many concerns voiced by its competitors. The British Internet Publisher Alliance which includes the online operations of ITN, News International, United News and Media and the Telegraph, believe this is one example of how the unique position of the BBC means it enjoys an unfair advantage in the highly competitive online market. See Newswire 5 July
The panel also decided that that the present structure of the BBC is preventing it from fully exploiting its commercial activities such as Beeb.com, while attracting criticism from competitors.
It was recommended that the BBC should sell a 49 per cent stake of BBC Worldwide to private investors in order to achieve greater revenue and to further develop Beeb.com.
The BBC however was not keen on this option, saying that while it agrees with the panel that it should make the best use of all its assets, BBC Worldwide should instead remain a wholly owned subsidiary and should work with a wide range of private sector partners.
The BBC will report back to the panel on these recommendations by the end of the year.
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