The BBC has clocked a million global downloads for its ad-funded iPad news app – even though it’s currently forbidden from releasing it in its native UK, says BBC.com’s Americas SVP Miranda Cresswell, who is speaking at our paidContent Mobile conference at Columbia University on Tuesday, July 20.
The BBC Trust is examining whether BBC apps launched back in Blighty, where the BBC is funded by a license fee, would hurt the commercial media market. It’s one example of how, though at home the Beeb is often restricted, BBC Worldwide is now in a strong commercial growth phase in the U.S. and internationally.
The BBC was allowed to start showing ads to overseas web users through BBC Worldwide in 2007. In 2009/10, this income hit £14.5 million ($22 million), but the costs of staffing up a U.S. ad sales team and investing in this week’s BBC News redesign (BBC Worldwide must pay the BBC for content and infrastructure) still left the site with a £13 million loss.
“In the U.S., we’ve tripled our advertising revenue in the last year – and this year I’m expecting to double it again; we’re feeling massively positive,” Cresswell says.
Ads are all in-house display sales to blue-chips, no network inventory, and Cresswell says “HP (NYSE: HPQ) is underwriting the launch” of the U.S.-facing redesigned BBC News, which has added eight online editorial staff at its Washington, DC, bureau. Ads are even running for The New York Times (NYSE: NYT), though Cresswell is confident: “We’ll get the readers back. On BBC America, we carry ads for other shows that don’t run on our network.”
In mobile, Cresswell says commercial models must be as mixed as BBC Worldwide’s are on the desktop, where it sells TV shows through distributors like iTunes Store and syndicates clips to sites like YouTube in addition to the ad-funded news and other sites gardenersworld.com, bbcgoodfood.com, topgear.com and radiotimes.com.
“Very quickly, we’ve seen on the iPad, the real action is web browsing. That was the thing that even Steve Jobs, bless him, missed. Apps are great but make a lot more sense on iPhone, where you can’t browse the web easily.”
The iPad app includes banner ads, but propositions must vary according to device: “Can we come up with different ad units for mobile, web, mobile web on iPad, and then apps? We need to be looking at the whole mix. Mobile is definitely not one-size-fits-all.”
BBC Worldwide has several pay-for mobile apps out there and, though the BBC’s Trust has instructed the corporation not to make any more commercial acquisitions like Lonely Planet, the travel publisher saw 500 percent higher income from its iPhone travel guides when it opportunistically discounted them during the recent Icelandic volcano eruption.
Going in to new territory, BBC Worldwide is also trying mobile subscriptions, repackaging BBC Radio 4’s intelligent UK talk shows in BBC Listener, a $12.99-a-quarter iPhone app.
Ultimately, despite clocking £30 million ($46 million) in digital sales across the business last year, BBC Worldwide still lost £20.8 million ($32 million) from its digital activities after continued investment. All BBC Worldwide profit goes back to the publicly-funded BBC in the UK, so effectively commercial digital activities are not yet contributing anything back to the public service, aside from the fees it pays for BBC content and use of its sites.
One addition that could improve things (but which is also requiring significant effort) – a long-mooted overseas version of iPlayer, the BBC catch-up TV service that has popularised VOD in the UK and which sees six percent of its viewing on mobile. Episodes of BBC shows popular in the U.S. – like Doctor Who and Torchwood – could prove moneyspinners Stateside, whether with pre-rolls or as pay-to-watch.
“There’s clearly massive consumer appetite for BBC video content; we see it on our iTunes downloads in the U.S., there’s huge untapped demand,” Cresswell says. “But figuring out the complexity of rights makes iPlayer a complex project. Give us a little more time.”