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Last Updated: Saturday, 23 August, 2003, 15:28 GMT 16:28 UK
Analysis: BBC online review

By Nick Higham
BBC arts and media correspondent

If you're reading this you're among the 10 million people who use the BBC's online services every month - more than for any other website except Google, Yahoo and Microsoft.

But when you log onto BBCi on the web, does it live up to the promises the corporation has made in the past?

And what effect is the BBC's dominant presence in the market for online services having on other commercial operators, many of whom complain that it siphons customers (and revenue) away from them?

To answer those questions the government has appointed Philip Graf to conduct a review of the BBC's online operations.

Internet user
The BBC's competitors claim it has an unfair advantage
Graf recently stepped down as chief executive of the newspaper company Trinity Mirror.

He is an independent figure who knows a thing or two about the media - and about new media.

The Mirror's own forays onto the web weren't notably successful.

For a time, it ran its own internet service provider, or ISP, called ic24, but the Mirror titles' websites are unambitious by comparison with some other national newspaper sites.

But at a local level, it's another story. Trinity Mirror's local papers have successfully developed their own websites, an extension of the parent titles, and have started to make money out of online classified advertising.

A MORI poll claims two million people say they came online in the first place because of the BBC
That experience could stand Graf in good stead when he turns to the BBC, which has plenty of local online content of its own.

This is not the first such review. All the BBC's digital services are being reviewed at the behest of the government - the first to get the treatment was BBC News 24, which was scrutinised by the former editor of the Financial Times, Richard Lambert, last year.

The reviews were one of the conditions attached to government approval for the launch of new services.

Ashley Highfield, the BBC's director of new media, says he welcomes the process.

The corporation has commissioned consultants KPMG to carry out its own survey of the BBC's online services - and in particular to look at two questions which Philip Graf will also be asking.

7.6bn market

Firstly, what impact have the BBC's services had on the market for new media generally?

And secondly, has the BBC fulfilled the promises it made when it launched the new services?

According to Highfield, KPMG reckons the BBC's services have had only a very limited impact.

In a market estimated to be worth 7.6bn in total, 6.1bn is e-commerce - something BBCi is not involved in -- although the wider BBC does have commercial online ventures which were not included in the scope of KPMG's study

Another 1.6bn is accounted for by internet service providers - again, a market BBCi isn't in.

One outcome of the review process may be a narrower and more clearly-focused set of obligations
Meanwhile a MORI poll claims two million people say they came online in the first place because of the BBC.

Highfield takes this as evidence the BBC has had an important role in driving take-up of online services generally, to the benefit not just of the BBC but of commercial websites and services as well.

Philip Graf is likely to find those assertions challenged by the BBC's commercial rivals, many of whom say the BBC's presence in the market makes it much more difficult for them to make money.

Emily Bell, editor-in-chief of the Guardian's website, Guardian Unlimited, concedes the BBC has done a good job of educating people about the web and of pioneering many of the developments which internet users now take for granted - like developing online communities of interest.

What worries her is the sheer scale and resources of the BBC's operation, which she says threatens to smother rivals.

"The BBC sets standards for the rest of us to live up to. But it has built those standards up with a very high level of resource."

Her solution is that the BBC should be obliged (as it sometimes does already) to link to other sites, to share software and to share expertise with other internet providers.


The BBC itself maintains it has indeed met the conditions set down when its online services first won formal approval.

But since those conditions were couched in extremely general terms, and framed in the early days of online services, that isn't difficult.

Highfield acknowledges that one outcome of the review process may be a narrower and more clearly-focused set of obligations - something he says would be useful.

The Graf review will feed into a wider process - the debate about the renewal of the BBC's Royal Charter, which expires at the end of 2006.

Meanwhile commercial rivals - and the general public - have until 17 November to submit comments to the online review, which will publish a final report next spring.

The rest of the BBC's digital TV and radio services are due to undergo similar scrutiny next year.

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