Last week at the Mobile World Congress, the BBC announced its plans to launch two iPhone applications. Until now the BBC has had a rather weak presence in the app store. Their app simply displayed a list of new articles from their site and then launched a web based version of the article in a safari browser. This was far from an optimal strategy if the BBC really wanted to leverage their brand on the mobile front.
By not optimizing the page for mobile devices there was really no reason for users to download their application. In addition none of the advertising was optimized for the iPhone, so CTR’s were probably very close to 0. That’s all in the past now and as of last week they have announced plans to release a proper news application in April as well as a sports application that will also cover the upcoming World Cup of Soccer (along with live radio feeds of the games).
This seems like a pretty obvious move for a news organization these days, no? Well apparently not! The BBC is a government run organization and although it is quite progressive and recently has been run very much like a business, it is still held in check by the BBC Trust. In the past two months we have seen the launch and re-launch of a number of major national British newspaper apps – i.e. The Telegraph and The Guardian. These apps are both best of breed mobile news readers and have claimed the top spots in the UK iTunes News category. These publishers, as well as a number of other publishers from the Newspaper Publishers Association (NPA – a very powerful association made up of all the national newspapers in the UK) are yelling foul saying that the BBC’s new app strategy will distort the market.
This is a very interesting case of private and public news organizations fighting it out in a very new arena. We will clearly be following what happens as the NPA is currently in the process of lobbying the BBC Trust and the British Department of Culture, Media and Sport to effectively have the applications banned. David Newell, the NPA’s director, summarized his organization’s argument in a terse and biting statement:
“Not for the first time, the BBC is preparing to muscle into a nascent market and trample over the aspirations of commercial news providers. At a time when the BBC is facing unprecedented levels of criticism over its expansion, and when the wider industry is investing in new models, it is extremely disappointing that the Corporation plans to launch services that would throw into serious doubt the commercial sector’s ability to make a return on its investment, and therefore its ability to support quality journalism.”
What is your take on this? Will the entrance of a real BBC app strategy hurt the current publishers? Will it distort the market or will it lead to greater competition and therefore increased innovation in the news app space? I know here in Canada the CBC (a Crown Corporation) has been aggressively working in the app space. They have built out an internal mobile team and are planning to push out a number of apps over 2010. Their CBC Radio application has held the #1 spot in the Canadian iTunes News category for some time now. If the CBC can do this, why can’t the BBC? We would love to hear from you. Should the BBC be allowed to release the application or not and if not, why? Let us know!
Update (2/26/2010):
An interesting piece popped up on the Times website today, however I am not sure whether this will have an effect on the future of the BBC’s iPhone apps. The piece talks about the end to an era of expansion for the BBC. The piece explains that the BBC will be cutting down most of its radio, TV and internet operations to allow for a level playing field with their corporate competitors. There are two quotes that really stand out to me here:
“Mark Thompson, the Director-General, will admit that the corporation, which is funded by the £3.6 billion annual licence fee, has become too large and must shrink to give its commercial rivals room to operate.”
and
“It will be seen as an attempt to show a potential Tory government that the BBC understands the effect the deep advertising recession has had on commercial rivals and that it does not need outside intervention to get its house in order.”
It appears that the BBC is going to be moving from their expansionary strategy and focus on quality over quantity. As I stated I am not sure whether this will have an effect on their app strategy, but it sounds like it may. The article can be found here and is definitely worth reading.
The BBC is very difficult to understand to outsiders. It is not a government run organisation. Its structure is almost opaque to all, but it is based on a trustees and governors. Only yesterday I saw a programme where it was (part jokingly) said that the BBC is not an organisation — it is a fragmented collection of warring factions. Many a true word is said in jest! The argument for a fundamental change in which it is [1] governed and [2] funded has been played out for over a decade.
Accusations and cries of foul play against the BBC for operating commercial interests is not new. Some time ago they bought the Lonely Planet imprint and many publishers (e.g. Rough Guides) referred them to the Monopolies Commission. Two years ago they tries to launch a platform off their cBBC (children’s bbc) channel to help children with the national curriculum. Again, education publishers cried foul.
So this development is nothing new. The BBC does indeed have an approved commercial arm, which of course sells its programming (for example) to other networks and countries.
What is interesting in this particular case (newspapers) is that of course the BBC’s own news service completely undermines Rupert Murdoch’s strategy to retake control of the value of news and to monetise online newspapers. The likes of Google can be blocked from crawling Murdoch’s content, but they cannot stop an organisation like the BBC publishing its own news, with its army of reporters and correspondents. Whilst bodies like the BBC exist, it makes it very difficult for Murdoch to implement his paywalls without losing market share.
The private sector has a point. The BBC receives funds uniquely (through the levy of a TV License in every household) whereas the private sector has to battle it out for revenue through advertising. It is not a level playing field therefore. If the BBC wants to be more commercially driven, it must seriously consider alternatives to the current way in which it is funded.
I don’t see a problem with the BBC doing this but can understand the reaction of the newspapers in the UK given how the BBC is funded.
I don’t see a problem with the BBC doing this but can understand the reaction of the newspapers in the UK given how the BBC is funded.