BBC Global News Adds Local Touches
Some gentle tweaks in Australia, India and Japan.
Mobile and social media has transformed the news business, unleashing sweeping changes in competition, consumption and monetization.
For BBC Global News, which runs on a break-even business model, that’s a particular challenge.
CEO Jim Egan must bring in about £100 million (US$152 million) each year to cover costs, spending about half on content and the remainder on commercial operations and marketing.
In a good year, he has some money left over to test out new channels for revenue and distribution.
Although 2016 looks okay but Egan will have to shave off 2% in costs in 2017, probably in editorial, to keep the unit’s financial performance on track.
“I am treading a pretty fine line when it comes to investments,” Egan tells Media Business Asia. “We are looking for small opportunities to try something out.”
These tend to be sandbox trials, low-risk and short-term. If some go well, they may pick up additional support from the BBC in the UK.
Apart from a few global deals with the likes of Facebook, regulatory and funding constraints limit wider collaboration with the BBC’s domestic services.
Internally, people sometimes people argue that Global News’ international strategy is too timid, Egan recounts.
The organization will only succeed in the US, for example, by diverting material resources from a mature pay-TV business into online.
“Those conversations,” Egan says, “are easier to have than execute.”
The US remains the biggest growth market, where JV partner AMC Networks handles affiliate sales after taking an almost 50% stake in BBC America two years ago.
Global News also has significant advantages, Egan explains, leveraging its parent’s brand and content in a genre where entry barriers are high.
The division manages the BBC World News channel as well as BBC.com digital properties outside the UK.
In general, pay-TV operators are still keen on services that provide live content, especially news and sports, as on-demand cannibalizes viewing in other genres.
Egan also hopes that the rollout of the BBC’s multiscreen offering BBC Player – which includes the World News channel and some VOD for shows such as Hard Talk – will shore up affiliate relationships.
Player made its global debut with StarHub in Singapore earlier this year.
Outside North America, a major priority, Global News has added local touches to digital properties in three markets in Asia-Pacific: Australia, India and Japan.
Last year, the BBC unveiled its first non-English ad-funded site in Japan.
Again, it’s a small investment but more needs to be done with the content, Egan says. The site has more unique visitors than expected, but page views are slightly off-target.
Some of the video has been translated and voiced by computer, with some human intervention to ensure accuracy. It’s an approach that could be deployed elsewhere.
“This potentially points the way to lower cost localization into other languages with essentially the same offer,” Egan muses.
English-language sites in Australia and India, meanwhile, have two to three journalists on hand to provide additional content and timely updates.
Any changes will apply modest rather than deep localization however, to protect the BBC’s positioning as a global news provider.
This consistency is more important than ever, Egan explains, as digital insurgents – some with less regard for balance and accuracy – compete for people’s time.
It’s also in keeping with the division’s focus on nurturing existing revenue streams, rather than pursuing dramatic growth.
The business may not have the funding of young pretenders such as BuzzFeed and Vice. But neither is it losing money or scaling back, Egan notes.
“Our economics may look unexciting,” he says. “It’s not terrible either.”
Ad Revenue Shifts
Digital audiences, meanwhile, have also become a major source of revenue. BBC Global News now makes more money from online advertising than from ads and sponsorships on TV.
Over the last two years, much of that growth has come from branded content on BBC.com’s advertiser-friendly verticals, such as sports, tech and automotive.
Egan expects this momentum to continue, as conventional online ad formats come under increasing pressure.
Last year, entertainment sibling BBC Worldwide set up BBC StoryWorks, an in-house studio for advertiser-funded content, to make the most of this trend.
Video ad sales are also promising, although content marketing and programmatic are the main engines of digital growth.
Global News has started selling advertising outside the UK for a just-launched vertical video service for mobile phones, initially as static ads placed between segments. Vertical video ads could follow in 2017.
Digital syndication is also growing, but from a low base.
Egan is less keen on a paywall for some BBC.com content however, worried that potential gains are unlikely to offset drops in advertising as visitor numbers decline.
“We don’t have that conversation very often,” he says. “We continue to be a mass market play.”