BBC Reports Digital Growth, but Net Loss

BBC Worldwide, the British broadcaster’s commercial arm, has reported a 57 percent year-on-year increase in digital media revenues, generating £21.9 million ($43 million) in sales in 2007/2008 compared with £13.9 million ($27.4 million) the previous year, according to its annual review.

However, net losses for the digital side of the business rose from £3.9 million ($7.7 million), to £10.9 million ($21.5 million) over the same period.

David Moody, BBC Worldwide’s digital Director, credited the revenue growth to the syndication of content to partners such as YouTube and Apple iTunes, and the launch of an ad-funded international website – bbc.com – in November last year.

He attributed the loss to product investment, specifically BBC.com and a new Video On Demand service, dubbed “Kangaroo,” which is due to launch later this year. The U.K.’s Competition Commission is currently investigating the project, which would see three of the U.K.’s biggest broadcasters; BBC, Channel 4, and ITV, join forces to offer video content online, presumably through an ad-supported or pay-per-view model.

According to Moody, BBCWW will enhance its digital media offering significantly in 2008/2009, generating revenue through Kangaroo, increased advertising across the BBC.com site, and perhaps through an international commercial version of its iPlayer, which offers BBC video content online.

Other than that, the organization’s two-part online strategy will persist, aiming firstly to “build a network of strong BBC-branded sites,” and secondly, “to distribute BBC content widely across the Web to reach potential users who are unlikely to come directly to BBC Worldwide’s own sites.”

Overall, BBC Worldwide’s profit grew 17 percent year-on-year to a total of £118 million ($233 million). Digital represented 2.7 percent of total sales, almost doubling from 1.5 percent the previous year.

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