BBC may redefine commercial online efforts

The BBC will soon redefine the scope of its overseas commercial arm, amid growing internal friction between the two wings over online strategy.

paidContent understands the regulating BBC Trust wants to pull BBC Worldwide, which is charged with commercialising BBC output overseas and at home, more closely in to the public-service mothership. CEO John Smith’s position is thought to be under discussion.

The trust, which approved BBC Worldwide’s acquisition of a majority of Lonely Planet in 2007, tried, two years later, to bar it from undertaking further mergers and acquisitions except in exceptional circumstances.

But the company has since made strategic investments in Californian mobile game tech firm Spaceport and crowdsourced video subtitle site Viki – something which is thought to have spooked Patten’s BBC Trust. It also last week launched a BBC Labs startup initiative.

The trust in April endorsed the principles of a draft new commercial framework proposed by outgoing director-general Mark Thompson that would “align its commercial activities more closely to its public service mission”. This will involve “focusing commercial activity on BBC-commissioned intellectual property” rather than developing new IP.

In the new framework, the trust may more directly instruct BBC Worldwide to limit investments. And it may yet ask the company to sell off Lonely Planet.

But BBC Worldwide may justifiably argue that investments like Spaceport and Viki could help it achieve the BBC Trust’s renewed aim of distributing BBC content on new platforms. Those investments are thought to have been for commercial service barter rather than for significant cash.

Likewise, BBC Worldwide says it will not invest in its Labs companies, only mentor them. And it is hard to argue that Top Gear or Doctor Who mobile games, for example, are anything but extensions of existing IP.

With the BBC’s Global iPlayer plan stalled in the U.S. thanks to cable operator reticence, alternatives to merely the VOD platform may arguably be considered a welcome way to take BBC content to the States.

Patten’s trust is keen that BBC Worldwide put empire building ambitions aside and refocus on its core aim of making money to return to the BBC, reducing reliance on license fee.

BBC Worldwide’s 2010/11 digital entertainment sales doubled to £27.1 million but still turned a £6.8 million loss after spending on building a ad sales team, a games unit and launching the Global iPlayer trial.

In other words, BBC Worldwide’s digital entertainment efforts are not yet returning any money to the core BBC.