'BBC colossus threatens to undermine other websites'

The BBC‘s increased spending on the web and plans to carry advertising overseas could undermine commercial journalism websites, according to senior online journalists.

Last week, a BBC Trust report revealed that the corporation had gone £36m over its annual budget (for the year to end March 2008) of £74.2m for bbc.co.uk, and that the budget for the current financial year has been set at £114.4m.

Martin Clarke, the Daily Mail’s online editorial director said he was most concerned with the BBC’s advances in the advertising market abroad. The BBC has sanctioned advertising on its international website, bbc.com.

He said: ‘In the long term, it will be very important because all newspaper websites will have to find a way to monetise foreign traffic, and that will be very difficult if they are in competition with a colossus like the BBC.

‘There is no question its website is built on its TV and radio output, paid for by the licence fee. The BBC eschews the market because it is such a big player online. It is not a level playing field because the rest of us do not havepublic subsidy.’

Last month Guardian News and Media’s director of digital content Emily Bell told delegates at the Online Publishers’ Association’s conference that the BBC’s advertising on its international website bbc.com was an ‘enormous state-funded intervention in the international news advertising market”.

Ed Roussel, Telegraph Media Group digital editor, said he was concerned at the amount of spend by the BBC, its lack of accountability for that spend, and the absence of ‘any serious consideration’of the impact of it on the private sector, especially when the industry was in a ‘precarious moment”.

Roussel said that the fact the BBC had spent £110m over the past year meant it was out-spending all of its newspaper competitors. It was a concern that the budget had doubled in a year and that ‘overspending in one year becomes the base year for spending in the next”.

‘In any other industry there would be an issue here about a level playing field. The BBC’s spending at that rate and that level has an impact on the market as a whole and that is a distinct concern.”

The Trust criticised the corporation’s management for ‘a serious breach’of bbc.co.uk’s service licence, ‘poor financial accountability’and a ‘lack’of management control.

The Trust has added a number of annexes to the service licence to make sure the service is distinctive.

Media commentator Maggie Brown said the issue now was whether a further £40m of expansion was justified.

Brown said: ‘I’d say there needs to be an overall pruning of the current service before expansion into local news and content for six to 12-year-olds. If you look at the detail you’ll see that there are 26 content elements to the current service.

‘It is hard to argue against the areas that score highly and are of public service – news, learning, history, children’s, religion, schools, where I live, and online information directly relating to programmes, but does the BBC need to do the softer focus on relationships, gardening, homes, health and food?”

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