BBC proposals may change economics of broadcasting

Mark Thompson

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The BBC could "transform the economics of the entire [broadcasting] sector" with a raft of new proposals, director general Mark Thompson has claimed

The corporation is offering to share technologies and news gathering resources with its commercial rivals, as well as the expertise of BBC Worldwide to help them exploit any rights they own internationally.

Other ideas include the BBC shouldering the cost of a marketing campaign for digital radio, and extending the DAB network to cover more than 90% of the population. The corporation is also looking at partnering with other PSBs to develop a single "simple, open standard" to deliver internet television on television sets.

It has put the ideas forward as its proposal to Ofcom, in line with the regulator's review of PSB funding after digital switchover.

Thompson said the BBC's ideas were not an exact fit with any of the four proposals laid out by Ofcom, because it was "much more radical" than the first proposal of "evolution".

"What's in a way a surprise is that there isn't a fifth option there, which is self help, about the sector transforming itself," he said.

"This is not so much an evolution but the re-engineering and transformation of the sector for a new set of economics. It is a much more radical version [of evolution]. Evolution sounds like the do-nothing option and this is not the do-nothing option."

He added that the BBC's ideas – which have yet to be "worked up" into concrete proposals or approved by the BBC Trust – stand to transform the entire industry.

"We can not only transform the economics of our own operation, but also more widely transform the economics of the entire sector."

BBC Trust chairman Sir Michael Lyons added that the proposals did not involve giving away value from the BBC, but were instead "making the pie itself bigger".

Rival broadcasters are most likely to welcome the BBC's offer to share any new technologies it develops so that they don't have to start from scratch on their own.

Thompson said that it has already had an approach from an unnamed PSB, and estimated that its expertise could save commercial rivals up to 20% of its content production costs.

He said: "We are manifestly going back to the absolute fundamentals about the way we make content and organise production. [The advances the BBC is making] are transforming the BBC in ways which are economically very significant. I'm proposing we share as much of that as possible with other broadcasters."

The BBC is currently looking at making a 20% saving in the cost of production by BBC Vision over a five year period, through the use of new technology. "If other broadcasters adopt that, that's 20% difference to the economics of their content cost base," Thompson said.

In addition, the BBC is proposing to share local and regional newsgathering resources with ITV, so that the commercial broadcaster can reduce the costs of its PSB commitments without compromising plurality in news.

Thompson said sharing footage for regional stories which are often relatively low down the news agenda would free up money for the bigger pieces.

"Quite a lot of costs are about getting footage of some of the more marginal stories. [Sharing footage would] mean you can concentrate resources on getting the story of the day done really thoroughly."

The BBC is also offering to help rival broadcasters exploit their international rights through BBC Worldwide, although this proposal is expected to hold less appeal. ITV is already developing its own framework to exploit international rights, whilst publisher-broadcaster Channel 4 does not own any of the rights to the programmes it airs.