BBC Creates New Net Subsidiary, Ends “Free” Trials With WAP Platforms
The BBC has today announced the creation of a new subsidiary to house its commercial internet holdings and a US venture capital partner to help fund it. Valued at £240m, the new company, beeb ventures, has signed an agreement with US-based internet investor, T H Lee Global Internet Managers (THLi).
THLi will pay £32.5m to acquire a minority stake in and fund the development of beeb.com and ISP, freebeeb.net, effective from 1 August this year. As part of the agreement Jeffrey Coats and Sharon Pipe, managing directors at THLi, will join the subsidiary company’s board of directors.
The new injection of capital will be aimed at key technology development and organisational expansion. Plans already in the pipeline include the launch of new sites, such as the recent dedicated Eve magazine website (see First Issue Review: Eve- Naked Ambition From BBC Worldwide), content and functionality enhancement of existing sites, further e-commerce opportunities and expansion into further new platforms, such as interactive TV, mobile phones and ADSL.
Rupert Gavin, chief executive of BBC Worldwide, said: “We are delighted to have attracted a partner of THLi’s calibre. The deal comes at a time of exceptional market opportunity, due to a forecast of explosive growth in UK e-commerce. THLi’s investment and expertise, together with the strength of the BBC brand, gives beeb.com and freebeeb.net a major strategic advantage in a rapidly growing marketplace.”
The latest research for UK e-commerce forecasts a growth from 1% of consumer spending in 1999 to 4% by 2004, representing a total market of £10bn, and significant growth is also expected in BBC Worldwide’s leading brands, which include music, travel and home interest. Beeb.com reached the top ten for online advertising revenue in the latest MMXI Europe survey and Sharon Pipe said: “The competitive technology and the organisational plans for beeb ventures are expected to accelerate beeb.com’s appeal among the primary “middle England” target market. We think beeb.com will be the premier e-commerce site in the UK.”
The BBC’s internet activities are split between public service (BBC Online), which is licence-fee funded, and BBC Worldwide’s commercial activities. While today’s announcement will create an umbrella for its commercial activities, BBC Online has been criticised recently for its uncommercial activities in a commercial environment.
A complaint was sent to the Office of Fair Trading from ITN, revealing the Corporation’s apparent attempts to monopolise digital news platforms by giving away its news to other platform operators for free (see BBC Makes Promises, ITN Makes Threats).
A spokesperson for the BBC confirmed today that its agreements to deliver news content to WAP platforms were part of technical trials. “We always planned to go forward on a commercial basis once these trials ended and are negotiating agreements with a number of operators now,” he said.
He confirmed that the Corporation runs a number of non-commercial deals – with AvantGo and Yahoo! – but said these are not comparable with WAP deals. “The deal with AvantGo allows users to simply download BBC news from the net to their palm-top. We do not have to re-version the news as we do with WAP, therefore it is not a special service. The deal with Yahoo! again allows the provision of digital news for free to its portal. It makes its available to the licence payer and routes readers back to the BBC website.”
The Corporation also signed a deal with Telewest today to make its interactive content available on its digital cable platform (see BBC Services To Be Made Available On Digital Cable).
BBC Worldwide: 020 8576 2000