THE BBC, Britain’s mammoth public-service broadcaster, has long been a cause for complaint among its competitors in television, radio and educational and magazine publishers. Newspapers, meanwhile, have been protected from it because they published in a different medium.
That’s no longer the case. The internet has brought the BBC and newspapers in direct competition—and the BBC looks like coming off best.
The improbable success online of Britain’s lumbering giant of a public-service broadcaster is largely down to John Birt, a former director-general who “got” the internet before any of the other big men of British media. He launched the corporation’s online operations in 1998, saying that the BBC would be a trusted guide for people bewildered by the variety of online services.
The BBC now has 525 sites. It spends £15m ($27m) a year on its news website and another £51m on others ranging from society and culture to science, nature and entertainment. But behind the websites are the vast newsgathering and programme-making resources, including over 5,000 journalists, funded by its annual £2.8 billion public subsidy.
For this year’s Chelsea Flower Show, for instance, the BBC’s gardening micro-site made it possible to zoom around each competing garden, watch an interview with the designer and click on “leaf hotspots” about individual plants. For this year’s election, the news website offered a wealth of easy-to-use statistical detail on constituencies, voting patterns and polls. This week the BBC announced free downloads of several Beethoven symphonies performed by one of its five in-house orchestras. That particularly annoys newspapers, whose online sites sometimes offer free music downloads but they have to pay the music industry for them.
It is the success of the BBC’s news website that most troubles newspapers. Its audience has increased from 1.6m unique weekly users in 2000 to 7.8m in 2005; and its content has a breadth and depth that newspapers struggle to match.
Newspapers need to build up their online businesses because their offline businesses are flagging. Total newspaper readership has fallen by about 30% since 1990 and readers are getting older as young people increasingly get their news from other sources—principally the internet. In 1990, 38% of newspaper readers were under 35. By 2002, the figure had dropped to 31%.
Just this week, Dominic Lawson, the editor of the Sunday Telegraph, was sacked for failing to stem its decline. Some papers are having some success in building audiences online—the Guardian, which has by far the most successful newspaper site, gets nearly half as many weekly users as the BBC—but the problem is turning them into money.
The difficulty for all newspaper websites is that most of their visitors tend to stay only briefly, viewing just a few pages. That makes it tricky to build a subscription model. Aside from specialised content, such as crosswords, or business news on the Financial Times’s FT.com, newspapers offer their content free. As for internet advertising, most of it goes to the biggest sites, such as Google and Yahoo!
Still, some papers are covering their online costs. The Guardian’s site is on the brink of making money. FT.com broke even at the end of 2002, after lots of investment, and the Daily Telegraph’s site started paying its way from 2002 onwards. But if the papers’ internet arms are to counterbalance the loss of revenue offline, they will have to start covering rather more than just their incremental costs.
Part of the papers’ problem online is that they’re papers: they don’t understand moving pictures and graphics. The BBC’s television background gives it a feel for what works well on the internet. And, crucially, it has far more journalists on tap than any newspaper. As the Sun website’s night team of four people rushed to cover the result of Michael Jackson’s child-abuse trial this week, its editor, Pete Picton, was dismayed to see how much the BBC was doing and with what resources. “They had a micro-site, journalists coming out of their ears, different angles and their own video footage,” he says. “We can’t compete with their breadth of material.”
Competition from the BBC does not just reduce traffic on the newspapers’ sites and the amount of cash they can earn from advertising. Taking people away from news also stops newspapers luring people into other areas of their sites such as personal finance, or classifieds, which have higher value for advertisers and generate more revenue, says Simon Waldman, head of digital publishing at the Guardian.
Richard Deverell, head of BBC News Interactive, argues that newspapers face such difficult challenges both online and off that the BBC is not a big factor. The BBC is making an effort to link its pages to other news organisations, he points out, both in Britain and abroad (depending on the subject) which in the past it did not.
That change comes as the result of a review last year of the BBC’s website by Philip Graf, a former boss of Trinity Mirror, a newspaper company, who concluded that the BBC was somewhat out of control online. Mr Graf admitted that he could not prove that the BBC’s online services damage its competitors. Nevertheless, he says, “there is no doubt that the BBC’s well-funded presence is very strong competition for newspapers on the internet.