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Tuesday, 31 October, 2000, 16:41 GMT
BBC ponders online adverts
Beeb.com screengrab
Beeb.com, where the BBC takes its audience shopping
Some web sites produced by BBC Online may carry advertising, according to the BBC's director-general, Greg Dyke.

Mr Dyke said his team was looking at "what are the commercial opportunities and what are the public service obligations" of the British Broadcasting Corporation.

Unlike many other public service broadcasters, the BBC does not carry any advertising on its radio and television channels, but is funded solely through a licence fee and revenues from re-selling its programmes

Advertising is shown only by the corporation's commercial ventures, among them BBC World, a 24 hour television news channel for an international audience, and websites like beeb.com, maintained by the BBC's commercial arm, BBC Worldwide.

Controversial

Putting advertising on previously non-commercial BBC web sites could prove controversial with the Corporation's rivals in the online world, who will say they face increased competition for limited advertising revenue.

Critics argue that even if the BBC's commercial ventures are "ring-fenced" from licence-payers' money, they nonetheless trade on the reputation built with licence fee resources, which provide much cheaper capital than that available to rivals.

Finding fresh revenue streams

However, industry analysts say that the BBC has to be innovative in raising money if it wants to compete in a multi-channel digital world with fragmented audiences.

In February, the UK government acknowledged this and allowed the BBC to increase the general licence fee to 104.

This provided the corporation with a cash boost of about 200m a year between now and 2006, but in return the BBC was told to raise 1bn through efficiency savings and more commercial revenue.

Dot.com cash

Selling content and advertising space for channels seen by an audience outside the United Kingdom could be one way to find the money.

With more than 200 million page views a month, BBC Online is the most visited content website in the UK.

The BBC's news website, BBC News Online, alone pulls in more than 130m page views and already draws a large international audience.

However, a spokesman for the corporation said Mr Dyke has ruled out any advertising on the BBC's domestic radio and television channels, or its domestic news and education web sites.

He said: "We have to look at maximising our commercial revenue and examine every avenue without using the licence fee. We have been asked to do the by the government".

Online advertising was just one of the ideas "being kicked around", he said.

During the summer, there had been rumours that the BBC might try to float some of its web ventures on the stock market in an attempt to raise money.

Mr Dyke had dismissed those stories as "complete rubbish".

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See also:

27 Feb 00 | Business
BBC denies dot com sell-off
15 May 00 | Business
Yahoo!, BBC content deal
25 Aug 00 | UK
The BBC's challenges
25 Aug 00 | UK
A multi-channel BBC?
21 Feb 00 | UK Politics
BBC digital fee dumped
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