The main target of Elliott’s ire is the recent £75m acquisition of Lonely Planet by BBC Worldwide, Auntie’s commercial arm - this puts the broadcaster in direct competition with Time Out, which also publishes travel guide (not to mention other rivals like Rough Guide, produced by FT parent Pearson). Elliott reckons it’s not fair that his company should be expected to compete with a global publicly-subsidised broadcaster, and argues that BBC Worldwide is getting ideas above its station (so to speak).
Elliott has already tried to get the Office of Fair Trading to investigate the deal, but they gave him short shrift – so it seems that he’s decided to try a more public attack. At the Edinburgh TV festival, he told an audience that the Lonely Planet acquisition was ‘a deal too far’ for BBC Worldwide. In fact, he thinks the best solution for all concerned is for the division to be broken up, with the broadcasting side (the bit that sells BBC content abroad) absorbed back into the organisation and the publishing arm sold off.
Elliott’s argument is that the BBC’s presence is distorting the market, because its heavily subsidised global reach gives it a promotional clout that the likes of Time Out could never hope – or afford – to emulate. ‘You have to assume there will be distortion in the marketplace and people like us haven't got a prayer of competing,’ he apparently told the panel. Fellow panellist Alex Graham, CEO of an independent production company, also warned that the division was endangering the BBC brand by taking stakes in start-up production companies.
Naturally, BBC Worldwide (which also publishes the Radio Times, and is the UK’s largest British-owned DVD and video distributor) begs to differ. Its strategy director David Moody, who was also in Edinburgh, said the criticism was ‘long on rhetoric and self interest and short on fact’ and argued that it was ‘absurd’ to suggest that a few small investments were distorting anything. He also said his division was a force for good because it was exporting British programmes overseas. Imagine how low our international standing would be if it wasn’t for Strictly Come Dancing.
So who’s right? Well, you can understand Elliott’s point that it will be tough for him to compete with a rival that can push its product around the world so easily – and relatively cheaply to boot. Whether it’s distorting the market is debatable, but it’s hard to avoid the conclusion that the playing field is not terribly level. On the other hand, if it gets sold off now, the Beeb will really be in bother if the licence fee gets chopped...
In today's bulletin:
Taylor Wimpey slumps to £1.5bn loss
RBS beefs up with boardroom bruisers
Bratz maker faces big Barbie smack-down
A pain to train for small businesses?
Elliott demands Time Out on BBC publishing arm