In the UK, Europe’s second biggest terrestrial TV market after Germany, British Broadcasting Corporation (BBC) announced radical changes in its structure earlier this year. This is seen as a first step towards privatisation in order to compete in a digital TV world. The major points are the separation of BBC’s broadcasting and production units and a closer integration of TV and radio services. The six new divisions are BBC Broadcast (including television, radio and multimedia), BBC Production (including arts, drama, sport, children’s events, factual, education, multimedia and music), BBC News (besides news and current affairs activites, a 24-hour digital news service is planned), BBC Worldwide (including marketing and distribution of BBC material), BBC Resources (providing resources for BBC production activities) and Corporate Centre (including corporate affairs, finance, information technology, personnel, policy and planning). Further job losses at the BBC are expected in addition to the 5,000 jobs that have already gone over the last few years.
It is believed that the restructuring will reduce production costs by 20% over the next ten years, an amount that will be useful to the funding of BBC’s expansion to digital services. It will spend US$ 300 million to develop digital terrestrial services in the UK. Following previous rumours that the media giant could not enter the digital world alone, it is now in talks with Rupert Murdoch’s BSkyB about a joint venture to launch digital cable and satellite channels. Gaining BBC’s source of programming is obviously invaluable for BSkyB in its competition with other digital satellite broadcasters. However, BBC is known to be also in talks with US TeleCommunications Inc (TCI) about launching up to six international channels, a project which would open the door to the US market for BBC. At the moment, a decision for one of the possible co-operation partners has not been made.
After leaving the alliance with German Bertelsmann, French Canal+ and Havas, Rupert Murdoch is now co-operating with Germany’s mighty Kirch Group. As part of their agreement, Kirch will buy a BSkyB stake and, in turn, BSkyB will take a stake in Kirch’s experience in launching digital satellite services when its initial 100-200 digital channels are due to launch in the late 1997 (at the earliest). Because of its strong dominance in the UK market, BSkyB is, in contrast to many of its European counterparts, not in a rush to launch digital services.
© August 1996 by Jens Barkemeyer