BBC eyes int’l SVOD expansion, keeps UKTV stake

BBC Worldwide will look at expanding new American SVOD service BBC Extra into new territories, and will not be forced to sell its £500 million (US$723 million) stake in UKTV, a government White Paper published has revealed this morning.

The BBC’s commercial arm has been considering “the best way to monetise its content abroad”, and whether an “international subscription model” could help the BBC to maximise global revenues.

The US service, which is expected to be called BBC Extra, launches later this year as the UK’s public broadcaster attempts to build BBCWW’s revenues, which fell last year. The Conservative government’s White Paper said an international SVOD service “could address these issues”.

“The government will support such initiatives, and enable the BBC to do what is needed to achieve the most value for licence fee payers,” the Paper noted.

The White Paper’s publication has been a hot button topic in the UK, with many in the creative industries concerned culture secretary John Whittingdale’s reform could damage Britain’s local production business. Whittingdale was criticised after recently joking to a Conservative student union meeting that closing the BBC was “a tempting prospect”.

Today the paper was unveiled to the public following weeks of leaks to sections of the British press.

Key proposals in the paper include:

• A loophole allowing consumers to watch BBC iPlayer online without a licence being closed
• The creation of a ‘unitary board’ comprising government and BBC appointed members that will replace the BBC Trust
• The appointment of Ofcom has the external regulator of the BBC, and the power for the media watchdog to “investigate any aspect of BBC services”
• The licence fee level increasing in line with inflation for five years from 2017/18
• Support for the creation of a commercially-focused BBC Studios production arm
• Removing an in-house production guarantee for all content except news and current affairs, something indies will appreciate
• The BBC Charter being extended to eleven years, with the option to assess half way through
• Transparency on contracts of all talent paid over £450,000 per year
• Ability for the National Audit Office to scrutinise BBC spending of its £3.7 billion licence fee income
• The BBC Charter to allow the BBC “to pilot some elements of subscription in addition to their current services”
• The concept of ‘distinctive content’ being placed at the heart of the pubcaster’s remit

The current BBC Charter comes to an end in December, at which point many of the government’s proposals will likely come into force.

The BBC responded to the paper by noting the government had not called for the pubcaster to reduce its size and scope, nor sell commercial assets – a reference to its 50% stake in profitable UK channels operator UKTV.

UKTV co-owner Scripps has at least once attempted to buy out BBCWW’s stake in the business, which has channels such as Dave, W and Yesterday. The US cable group has lobbied government to push through a deal, but this has not come to pass.

“This White Paper delivers a mandate for the strong, creative BBC the public believe in,” said BBC director general Tony Hall. A BBC that will be good for the creative industries – and most importantly of all, for Britain.

“There has been a big debate about the future of the BBC. Searching questions have been asked about its role and its place in the UK. That’s right and healthy, and I welcome that debate.

“At the end, we have an eleven-year Charter, a licence fee guaranteed for eleven years, and an endorsement of the scale and scope of what the BBC does today. The White Paper reaffirms our mission to inform, educate and entertain all audiences on television, on radio and online.”

However, the BBC said it is concerned over the plan to increase the NAO’s powers, and how the new unitary board will be formed. The government’s paper suggests 50% of this would be appointed by the broadcaster, with six appointed by politicians.

“We recognise that the government has moved, but we need to debate these issues to ensure the arrangements for the board achieve the correct balance of independence, public oversight and operational effectiveness. We believe there is more than enough time to get this right, and we will continue to discuss this with the Government,” said BBC Trust chairman Rona Fairhead.

The NAO replied with a statement, stating: “The NAO has been auditing the BBC for a decade and this proposal would simply mean an extension of our existing work to audit the annual report and accounts and subject the Corporation to greater scrutiny – like any other public body. The BBC on a number of occasions has acknowledged the benefits of our work to shine a light on where it can improve its value for money.”

Whittingdale opponents such as Armando Iannucci welcomed the paper, with the Thick of It creator tweeting: “Let’s never go through again ten or so months of uncertainty and anti-BBC tone that damaged the best TV industry in the world.”