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BBC news site facing extinction?

Tough times for British media institution

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The Conservative Party's culture spokesman John Whittingdale made the BBC's annus horribilis even worse this week when he said he was "not persuaded" that a public service website was a necessary thing.

This was immediately translated into "Tories to shut down BBC News website if they win election". It's a catchy headline. Plus such a move would appeal to all the UK's other media organisations who are sick of the BBC's domination of the Internet and provide the Tories with some much-needed backing.

It is, however, total nonsense. Mr Whittingdale is on holiday, leaving his spokeswoman to explain the point he was making. "It is not clear why BBCi is on the Net when, by and large, the same services are provided by commercial operators," she explained. "He thinks the BBC should only provide services that no one else does."

It would be political madness to have a policy to shut down arguably the best and largest news website in the world. BBC News online receives 660 million page impressions a month, with 9.1 million UK users reading it (around 30 million worldwide). Compare this with its nearest rival - Guardian Unlimited - that has 80 million page impressions a month and 7.2 million users, many from outside the UK. All other newspapers' sites are at least a third the size of the Guardian's.

Despite a recent redesign that has made the site harder to use, BBC News online remains one of the most comprehensive and impressive websites that exist on the Internet. Rivals fume at its resources and public money being wasted, but costing somewhere around £10 million a year - less than one per cent of the BBC's total revenue or less than 20p a year for each UK citizen - it is extremely good value. Most of what the news site does is repackage already produced news items for use on the Web. UK citizens have already paid the production costs and for a nominal extra fee, all that information is made available instantly on the Internet.

There is room for cuts though, and the BBC knows it. There are too many dedicated online staff hired to create original content of questionable value. At the end of March, it axed 100 new media staff - eight per cent of the total. More are expected to go some time this year.

The real issue

However, the question of the BBC News site is a red herring. What everyone, including Whittingdale, is really getting at is the £112 million spent this year on its Internet services - BBC Online. When funding for BBC Online was first approved in 1997, critics claim the director-general John Birt promised to spend no more than £21 million annually. But in 2001, the BBC spent £52.4 million; in 2002, £100.4 million.

The BBC now runs 25,000 different websites covering every topic under the sun, and many people, particularly companies, feel this is a waste of public money. Why should all UK citizens be forced into paying for content that a free market is already supplying? It didn't help either when, because of its gargantuan size and bureaucracy, huge overlaps occurred in material put online. In 1998, for example, there were no less than three BBC websites dedicated to the World Cup.

But BBC Online itself is just the pawn in a much larger game of media chess which includes radio, magazines and, most importantly, TV. The BBC now exists in an entirely different world to the one it was created in, yet it has changed surprisingly little.

The fact that is funded by every household in the UK paying a government-decided TV "tax" of £116 every year puts it in a unique position. On the one hand it is free from all the rigours of advertisers and commercialism, but on the other hand it needs to justify what it spends the money on.

This balance is struck through a Royal Charter and an accompanying Agreement between the government and BBC that outlines its autonomy and details its public obligations - in particular its famous remit to "inform, educate and entertain". You can review both at http://www.bbc.co.uk/info/policies/charter.

The first charter was created in 1927 after the then chancellor Winston Churchill unsuccessfully tried to turn it into a government body when it gave a fair account of the General Strike that he didn't like. There have been seven since then and the current 10-year charter is up for renewal on 31 December 2006.

And this is the key issue. When the current charter was created in 1996, the media was on the cusp of several huge developments. The Internet was barely known, Sky (or rather BSkyB) was beginning to find its feet, Channel 5 had just been approved and widespread digital TV was on the horizon.

The new charter to be agreed in 2006 will not only have to account for the previous decade's huge changes but also prescribe for the following decade. And not surprisingly, the BBC, the politicians and all the BBC's commercial competitors have different perspectives on what should be in it.

The BBC knows it has to move in a more commercial direction as the reality of a television licence becomes less viable in the modern world and it has desperately trying to strike the right balance between public service and popularity. While many criticise the current director-general Greg Dyke for shifting the corporation in this direction, his appointment in 2000 could hardly have been a clearer signal of the BBC's intentions. Dyke spent almost his entire career in the commercial TV world: He was managing director of LWT, chief exec of Pearson and is on the board of the most commercially orientated football clubs in the world - Manchester United.

The BBC's Internet efforts will however prove particularly contentious in the shaping of the new charter. Not only is the Internet clearly going to become a more and more important element of our lives but people are very slowly getting used to the idea of paying for Internet content. Everything that the BBC can be forced not to offer for free, can be supplied for a fee by someone else.

The controversial history of BBC Online

BBC Online has been provoking outrage from its very inception in September 1996. Deputy director-general Bob Phillis initially planned to use the Web to sell content. Beeb.com was a commercial company that would make £50 million a year with computer giant ICL. BBC rivals were furious and said so.

But while news (pulled back under BBC control just three months later and spectacularly launched as the BBC News site a year after that) shows just how right the BBC can get the Internet, Beeb.com shows its total inability to function in a commercial Internet environment.

Two years after its launch, ICL finally pulled the plug on an ailing Beeb.com. And then, two years' later in September 2000, the BBC tried again. A multi-million-pound ad campaign relaunched Beeb.com as a shopping site (and threw a huge party where, this writer remembers, possibly the world's greatest ever group of talentless ego-maniacs gathered). Investors pumped in £32.5 million. Two years later, the same story - Beeb.com was shut down and millions of pounds were written off.

But the BBC, freed from constraints in this new medium and caught up in the dotcom madness, remained determined to make money from the Net. Execs discovered the cancer of brands and tried to "leverage" them. They failed. A BBC Internet service provider, Freebeeb.net was announced in 1999 on the back of the ISP boom. Millions of pounds were wasted in advertising, millions more in setting up the service. It stills exists to this day but only because the BBC doesn't want the embarrassment of shutting it down.

New BBC Online head honcho Ashley Highfield then tried to make money from a commercial international news site at BBC.com, complete with advertising. It was stillborn. Then he suggested a pay-per-view online service. That was over two years ago and still nothing. November 2001 saw all BBC online content renamed BBCi. And as with all the best rebrandings, it didn't make the foggiest difference.

But while the "blue sky" thinkers, execs and dotcom yuppies continued to waste millions on harebrained schemes, the company's Internet Services arm continued to expand, releasing vast quantities of free content out onto the Web.

This, says critics, is a waste of money and resources. But does it "inform, educate and entertain"? Well, yes it does. Plus, the BBC argues, without the tons of information it put out on the Internet for free, would we really have seen the huge take-up in Internet access across the UK? If you remember, the government made big play of how it would encourage Net access, yet its various programmes were a complete failure. Do we have the BBC to thank for much of Britain getting online?

The same is happening again now with broadband. New Labour claims it wants everyone to have it. BT has been knocked for six by demand for fast Internet access. And commercial content suppliers say it is a vicious circle that people don't want it until there is some content and they can't afford to do it unless there are enough people out there. Has Auntie come to our rescue again and broken that circle?

Plus, as those inside the BBC see it, it is not the Internet that is somehow the problem here. The Internet is no-more-no-less than a medium and the BBC is simply making its products available on it. At the same time, it is pushing the boundaries by realising what can be done with the technology. How can anyone argue that having TV and radio programmes available to watch or listen to at a time of your choosing is not a good thing?

Foe or foe?

Hopefully these questions will form part of the review of BBC Online that the government this year and which will be carried out by ex-Trinity Mirror chief exec Philip Graf. Graf is a man who knows all about wasting money online - he lost £90 million building sites for his papers and creating an ISP. In the end, hundreds were left without jobs and the ISP's customer list was sold to an investment firm for £4.5 million. It is uncertain whether he can see the positive aspects behind expanding into the Internet.

The Tories meanwhile, as the most technically inept political party, have not restricted themselves to BBC Online in their own review, headed by ex-head of Channel Five, David Elstein.

Mr Elstein is on record as saying the BBC licence fee is worse than the poll tax. He is joined by David Cox - an ex-LWT exec, friend of John Birt's and a man who reportedly wrote "Fuck off Dyke and don't come back" on the current BBC director-general's leaving card when he left LWT in 1983. Mr Cox has already expressed his opinion in an article in the New Statesman. Using the wonderfully harmonious issue of class, he wrote: "Since the BBC's output is consumed disproportionately by the middle classes, the system picks the pockets of the poor to fund the pleasures of the better off."

Observers have no idea how the Tories final report into the BBC will come out.

And if you thought the New Labour government was a friend to the BBC, look no further than the current saga surrounding dead scientist Dr Kelly - where the Blair government went head-to-head with the corporation, sparking an almost unprecedented Hutton Inquiry. New Labour had clearly been spoiling for a fight ever since John Simpson didn't quite agree with the government line while standing under missiles in Belgrade. The left-wing bias of many BBC employees has always made it unpopular with right-wing governments.

And then there's Rupert Murdoch, who is so virulently opposed to the BBC for blocking his domination efforts in the UK's TV market that the heads of his media arms spending more time attacking the BBC than they do telling people why they might be better.

Often they come up with new ideas over how the BBC can be helped into the future. Tony Ball, for example, the chief exec of BSkyB. He took the opportunity of his keynote speech at the recent Edinburgh TV festival to outline his view of the BBC's future.

The BBC should be forced to sell off its most popular programmes he suggested. And banned from buying any imports. Then the "cash-stuffed" organisation would put its licence fee to proper use - something that 51 per cent of people don't think is value for money. According to a poll sponsored by Sky.

Greg Dyke wasn't impressed and pointed out quite fairly that Sky spends just five per cent of its revenue on original British production and treats programmes as saleable commodities rather things of inherent worth.

It could also be pointed out that Sky's annual revenues are £3.1 billion, while the BBC's are £2.7 billion. And that the BBC's TV programmes, radio and Internet services cost £116 a year, whereas Sky's sole TV options vary from £300 to £500 a year.

Even Channel 4 hates the BBC. At the end of last year, presenter Jon Snow asked whether the licence fee was a "healthy" idea. "I'm not sure it's healthy to have an artificial situation that's dependent on a tax," he explained, saying that because Channel 4 was poorer, it had less access to important places like Westminster.

The reason behind the frustration is clear. According to the ITC, in 2002, the BBC's revenue went up by six per cent. Pay TV's revenues (including Sky) went up by four per cent. But advertising revenue, which ITV, Channel 4 and Channel Five are reliant on, went down seven per cent. The BBC has more money and didn't have to work for it either.

The crux of it

Why is the BBC so reviled at the moment then? It is all simply a matter of envy? No. Everyone knows someone richer than themselves but if that person is polite, friendly or agreeable, it doesn't bother you.

The problem is that the BBC of today is an incredibly arrogant organisation - and that gets people's backs up. As the BBC has grown more and more out of touch with the world around it, it has desperately clung to its culture. And that refusal to change has seen it faced with frustration and anger, which in turn has seen it tighten up in indignation.

The National Union of Journalists recently revealed that the BBC was the worst media organisation in the UK for bullying. Numerous examples of blame culture have emerged in recent years. People from outside the organisation have been appalled by the politics and cliques within the BBC. Tales abound of petulant, unpleasant, even sadistic, producers and middle-managers lashing out to disguise their all-too-real fear of discovery.

Comic of the moment Ricky Gervais said on his radio show recently that he was amazed at the number of hopeless executives within the BBC that are highly paid but don't appear to do anything. "It makes you want to wander up to them and say 'What do you actually do?'," he said.

The arrogance extends throughout the organisation. While the media feeds off itself and rarely attributes where the story originally came from, the BBC is almost legendary in its belief that if it wasn't featured on the BBC no one would have heard about it and that it has no need to say where it came from.

Experts and specialists are regularly asked for the benefit of their experience but the very fact it is the BBC asking is supposed to be compensation enough for their time and effort. And in the ultimate act of arrogance, if someone isn't prepared to drop everything, the BBC will remove them from a list of potential spokespeople.

Unfortunately, this has led in many cases to disparate news arms of the BBC using precisely the same contacts each time. The fact that the entirety of the BBC appeared to have only source regarding the Iraq war dossiers is testament to this self-defeating approach.

But Auntie is changing, slowly, gradually. The move towards more commercial programmes shows that the BBC realises the licence fee, as it is, cannot last forever. But while it is pumping out intrinsically worthless but popular programmes along the same lines as ITV, it will face the fury of commercial rivals and BBC viewers that feel cheated.

Greg Dyke, to his credit, is trying to reform the BBC's culture in time for whatever comes after 2006 and inevitably this is making him a lot of enemies. Perhaps he foresees a future put forward by some of his competitors - that the public's money is put into a national pot from which public interest programmes are funded and any TV company is entitled to bid. But in the meantime, he will do everything he can to hold onto the licence fee while others try to pull it away.

What will become of the BBC only time will tell. What we do know though is that a public content provider is as much a part of Britain's consciousness as the National Health Service. Both are impossible to scrap and argument along these lines should be roundly ignored. What we do need to find is a way to make their transition into the modern, competitive world as smooth and painless as possible. ®

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