BBC Worldwide Ltd. is the wholly owned commercial subsidiary of the BBC, formed out of a restructuring of its predecessor BBC Enterprises in 1995. The company monetises BBC brands, selling BBC and other British programming for broadcast abroad with the aim of supplementing the income received by the BBC through the licence fee.
In 2013/14, BBC Worldwide generated headline profits of £157.4m and headline sales of £1,042.3m and returned £173.8m to the BBC.
BBC Worldwide's profit rate was 11.2% in 2011/2012, up slightly from 9.6% the previous year, down from a peak of 21.5% in 2002/2003, contrasting with 7.8% in 2003/2004.
In addition to broadcasting, the BBC has for much of its life also produced additional materials for sale, the profits of which would be returned to the corporation to aid in the financing of these services. The highest profile of these early products was the listings magazine Radio Times, but the net revenue gained from this in 1928 (£93,686, 10s, 1d) only equated to 10% of total BBC income.
Prior to 1979, several BBC departments dealt with the exploitation and sale of BBC brands and programmes. BBC Publications, which produced magazines, books and other supplementary materials, had expanded rapidly in the late 1960s but still had difficulties with finances: in 1974 the division made a loss of £14,000. This was rectified however as the economic situation eased and by 1982 BBC Publications had a trading profit of £4.7 million. BBC Transcription Services licensed BBC Radio material to overseas broadcasters.
The selling of television programmes was at first handled in 1958 with the establishment of a business manager post. This gradually expanded until the establishment of the Television Promotions (later renamed Television Enterprises) department in 1960 under a general manager. In its first year, the department saw the sale of 550 programmes overseas with a turnover of £234,000, with a further 1,200 programmes sold the following year. Radio programmes were only exploited on the same level with the creation of the Radio Enterprises department in 1965. However, following the retirement of the Radio Enterprises general manager in 1969, the two departments were merged to form the BBC Enterprises department.
In 1979 the department became BBC Enterprises Ltd., a subsidiary company wholly owned by the BBC. By 1982, the division were expanding with divisions responsible for home video (under the brand BBC Video), recorded audio (under the brands BBC Records and BBC Cassettes), film and merchanding. At this point the company had a turnover of £23 million. On 1 April 1986, all commercial activities of the corporation, including BBC Publications, was merged into BBC Enterprises Ltd.
In 1991 BBC World Service Television became the first commercially funded BBC broadcasting operation after the Foreign Office refused to pay for it. BBC Enterprises Ltd was subsequently reorganised in 1995 as BBC Worldwide Ltd. A review of the BBC's commercial activities took place in 2004 and concluded that the sell off of BBC Worldwide's assets would not be as advantageous as keeping the business and driving it harder. Instead, some changes to its remit, focus, structure and governance were made, e.g. that it would only publish titles in the UK linked to BBC programmes or key genres.
In 2004, BBC Video merged with Video Collection International to form 2 Entertain, which was part owned by BBC Worldwide; the following year the company sold Eve magazine to Haymarket Group and in 2006 the company sold a majority stake in BBC Books to publisher Random House.
In 2007 BBC Worldwide purchased a 75% stake in the travel guide publisher Lonely Planet, acquiring the final 25% of the company in 2011. The acquisition was part of the BBC's strategy to grow its online portfolio and to increase its operations in Australia and the USA.
In January 2009 it was announced that Ofcom had put forward the recommendation that Channel 4 merge with either the commercial network Five or BBC Worldwide. Channel 4's preferred option of a partnership with the latter was confirmed by chief executive Andy Duncan, who added: "We're in discussions with BBC Worldwide at the moment and they're really very exciting." In the same year, the company was awarded the Queen's Award for Enterprise in recognition of the companies growth and success.
BBC Worldwide sold Lonely Planet in 2013 to Kentucky billionaire Brad Kelley's NC2 Media for US$75 million (£51.5 million)— significantly less than the £130.2 million the BBC had paid for the company, at an £80 million loss.
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Historical price conversion as per RPI figures from "Office for National Statistics – Dataset selector". Retrieved 24 August 2013.
In 2013, BBC Worldwide reorganised the company along geographical, rather than divisional, lines to better serve its audiences around the world and to position itself to take advantage of opportunities in high growth markets. The seven geographic markets are grouped into three regions: North America; UK, Australia and New Zealand; and Global Markets (Asia, CEMA, Latin America and Western Europe). The two global business areas - Content and Brands - set the strategic framework and parameters for activities within the regions and keep a close connection into BBC Worldwide's parent, the BBC. Digital is embedded throughout the business.
BBC Worldwide is responsible for a wide range of commercial activities, primarily connected in some way with the output and public purposes of the main BBC. In the past, the business was divided into five operating businesses which covered the entire operations of the company: Channels; Content and Production; Brands, Consumers and New Ventures, Consumer Products and Sales and Distributions.
The Content and Production division was formed in 2006 and invests the company's money into new productions by both the BBC and other independent productions. It also exploits the formats of BBC programmes and alters them to be suitable for an international audience – an example is the exploitation of the Strictly Come Dancing brand to become Dancing with the Stars – maximising revenues by receiving a production fee from the local broadcaster as well as a sum from selling the initial re-versioning rights. The division works alongside the Sales and Distribution division, which sells the broadcasting rights to completed programmes made by the BBC and other producers – an example being the Red Production Company drama Mine All Mine for the ITV network in 2004. It includes the selling of individual clips through the BBC Motion Gallery to other broadcasters. In the financial year 2010/11, this division sold the rights to over 74,000 hours worth of television content.
The other two divisions of the company deal with the individual programme brands: Global Brands focuses on the international recognition of the brands while the Consumer Products division produces a variety of goods based around these brands. The work of the former includes expanding the brands into new areas – the Top Gear Live tour is a key example of this. The latter creates and sells a variety of consumer products, occasionally as a stake or partnership in another company, including VHS and DVD releases, spoken word and music audio products, CD-ROMs, videogames, books and magazines.
These commercial activities allow BBC Worldwide to return profits and dividends to the BBC to re-invest in its broadcasting operations. In 2007/08 BBC Worldwide invested £75.1m in in-house and independent programmes commissioned by the BBC. However, the BBC has often been criticised for the amount of money it makes from BBC Worldwide. Some commercial rivals protest at the advantage the company has from being associated with and being able to exploit the programme catalogue and resources of the BBC to provide its goods and services.
Channel 4 should become part of a bigger organisation through a merger or partnerships, Ofcom has recommended.