MCI INTERVIEW
MCI INTERVIEW sean.jackson@informa.com
Auntie knows best
The largest broadcasting corporation in the world is stepping up its mobile plans. Sean
Jackson talks to Peter Mercier, head of mobile at BBC Worldwide’s Digital Media.
�BC Worldwide is a wholly
owned subsidiary of the UK’s
state-owned broadcaster. It was
created—in its current form—14 years
ago in order to exploit the intellectual
property of the BBC overseas. There
are six operating businesses within
BBC Worldwide—Global Channels,
Global TV Sales, Content & Production,
Magazines, Home Entertainment and
Digital Media.
“We were created to take risks that
would be inappropriate for the BBC to
take with licence fee payers’ money,”
explains Mercier. “So we are an independent
way of raising money.”
Originally, BBC Worldwide focused
on syndicating programmes,
before moving into launching magazines
both in the UK and also
overseas. It then began investing
in pay TV channels—the firm is a
50:50 shareholder with Virgin Media
in UKTV, which includes channels
such as UK Gold and Dave. The firm
is also busy creating TV channels
overseas.
“My role in Digital Media is to
take those activities and exploit that
material through digital outlets,” says
Mercier. “We have a home entertainment
offering—DVDs—that’s a
joint venture with [UK high street
store] Woolworth’s, we’re looking at
ways people can download shows
online, we’re looking at YouTube and
MySpace. In mobile we’re syndicating
the video content so that we have
and the mobile merchandise content,
which includes ringtones, images, or
licensing games,” he says.
The common thread to all this is the
use of the BBC’s intellectual property
and brand to build up commercial
businesses in an environment that
hasn’t been a traditional stomping
ground for the BBC. “As a wholly
owned subsidiary, BBC Worldwide
takes all of the profits from new business
and rolls it back into the BBC so
it can make more programmes. So it’s
cyclical,” says Mercier.
Peter Mercier
Last year, on revenues of £810m,
BBC Worldwide returned £111m back
to the BBC in profits.
Digital Media signed its first syndication
contract in mobile 18 months
ago. The deal, with Orange, saw the
carrier making a variety of BBC
archive material available for video
download. It’s fair to say the BBC’s
mobile profile is relatively low but
Mercier reckons BBC Worldwide’s
CEO John Smith has “very aggressive”
growth plans.
Quite how Smith’s growth plans fit
in with BBC director general Mark
Thompson’s recent cutbacks remains
to be seen. Thompson announced 1,800
redundancies, a reduction in programming
output by ten per cent and the
sale of the firm’s flagship studios,
Television Centre, in October.
The public service arm of the BBC
did, however, make positive headlines
recently when it announced that its
20 Mobile Communications International | First for news, best for business
content would be available to the
public for free through UK operator
The Cloud’s wifi network. Would
BBC Worldwide consider something
similar, perhaps covering costs using
advertising rather than licence fee?
Subsidising distribution channels using
advertising is a model that many
in the industry are backing.
“Their [the BBC’s] objectives are
about reach. In order to make sure
everyone paying that money [the licence
fee] has access to content where
and whenever they want it. That’s the
core of their strategy. Our strategy is
really about how we monetise that,”
says Mercier.
“We’ve been having discussions
with various organisations as part
of the syndication deals, people like
YouTube and MySpace. It is about syndicating
content in a paid for environment.
Whether that is advertising as is
the case with YouTube and MySpace
or pay per download models like O2.
We’ll look at those models where there
is money in it for us.”
Mercier explains how syndication
deals are struck: “First of all it is about
securing the rights, secondly it is about
securing distribution—we have 3, Orange
and O2 in the UK, I’ve done a deal
in Denmark and one with Telecom New
Zealand. We’re trying to build up that
distribution pipeline. The third thing
is about product, so that’s how we use
the rights and use the distribution.
We’ve got to find new ways to exploit
those properties. So with games, for
example, we’ve done a deal with the
Weakest Link and we’re launching the
third iteration of that game. We’re in
conversations with other publishers
and games developers about a range
of other products.”
On the matter of money Mercier
keeps his cards predictably close to
his chest. He concedes profits are
“infinitesimal” at the moment, largely
because we’re at the very start of the
journey, he says. “It’s really early days.
It is a small business. At this stage in
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