BBC Worldwide - summary of new strategy
At its meeting on 17 March the Trust approved a new strategy for BBC Worldwide, the commercial subsidiary of the BBC charged with securing value for licence fee payers from the BBC's programmes and other assets.
The Trust is responsible for setting the overall strategic direction of the BBC, including its commercial activities, and for approving high-level strategy and budgets, and the BBC Agreement requires a commercial strategy, adopted by the Executive Board, to be approved by the BBC Trust.
The Trust has set three fundamental principles about the way in which the BBC should conduct its commercial activity, and takes account of these in deciding whether to approve strategic proposals:
- The BBC should safeguard the value derived from its intellectual property
- It should exploit that value on the licence fee payer's behalf
- It should make sure no commercial activity damages the core brand and reputation of the BBC, either at home or abroad.
In November 2009 the Trust concluded an 18-month review of the mandate, strategy and governance arrangements for BBC commercial activity and set out a series of changes to the future remit and operation for BBC Worldwide, the BBC's commercial arm. The changes included:
- An end to mergers and acquisitions unless there are exceptional circumstances
- A clearer focus on securing value from the BBC's own intellectual property
- An exit from any activity that is not in keeping with the BBC brand
- Divestment of stakes in non-BBC branded international channels over time where it makes commercial sense
- A more transparent 'first look', with greater market testing to establish the right pricing structures.
In addition, the Trust noted the Executive's recommendation that Worldwide should become a more internationally facing business, and recognised the important contribution that BBC Worldwide can make to delivery of the BBC's fifth public purpose - bringing the UK to the world and the world to the UK, but considered that such activity must contribute to the BBC's fulfilment of its public purposes as well as the scale of the dividend passed back to the BBC.
Since then the BBC has been working to develop the strategy now approved by the Trust. Initial proposals were put to the Trust early in 2010 but consideration of final plans was put on hold until the implications of a review of global strategy and of the new licence fee settlement could be taken into account. The proposals came back to the Trust in February 2011 and were cleared in March.
BBC Worldwide operates as a commercial business and is not publicly funded. As such, much of the detail in its strategy is commercially sensitive. We have, however, included a high level summary of its new strategy here.
The Trust has approved the BBC Executive's overarching objective that BBC Worldwide “should support the BBC's public service mission by exploiting the commercial potential of BBC programmes, formats, intellectual property, talent and the brand in ways which are fully consistent with BBC standards and values. It should focus increasingly on international opportunities and, wherever possible, help other high quality British intellectual property reach global markets”.
The new strategy acknowledges that BBC Worldwide is an important element of the BBC's overall finances and continues to contribute significant returns to the BBC to support programme investment, returning £470m in dividends and programme investment over the last three years. It recognises the role BBC Worldwide plays in returning value to Licence Fee Payers and in supporting the BBC's public service mission by exploiting the commercial potential of BBC intellectual property. In addition, BBC Worldwide brings wider benefits to the UK creative economy through its position as the leading vehicle for UK creative exports.
The BBC's strategy for BBC Worldwide is to ensure it delivers growing sustainable dividends (within the parameters set by the BBC Executive and the Trust) in support of the BBC's overall funding model.
The Trust has set clear parameters within which BBC Worldwide must operate. These parameters were set out in the Commercial and Global Reviews and ensure that BBC Worldwide's activity is fully aligned with the BBC's Public Service interest and include a focus on BBC intellectual property and international growth.
The BBC Executive's strategy for BBC Worldwide is now to develop a more integrated and ‘balanced' internationally-focused portfolio that, within the agreed parameters, balances the need for growth with acceptable levels of risk. BBC Worldwide should also seek to invest in growth businesses which offer new rights monetisation opportunities.
The BBC will closely monitor the implementation of the strategy and regularly review its performance. There will also be updates as appropriate to the Trust.
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