Unfair competition

2005
unfair-competition

Tony Elliot, the founder of listings magazine Time Out, has been speaking out at the Edinburgh Festival about the BBC's acquisition of rival travel guide Lonely Planet, through its profitable commercial arm, BBC Worldwide. He is not the first person to complain about the Beeb's commercial activities: online content providers are also furious at its vast website, which they say competes directly with them on the back of public subsidies.

Faced with what they regarded as a disappointing licence-fee settlement, BBC executives have decided to try to plug the budget gap by boosting their commercial income. But when taxpayer-funded corporations start competing with private companies, the danger of unfair competition is obvious. Public funds are intended for public purposes - not for creating new public businesses to compete with existing private ones. If private providers can do the same job – or better – the state should stick to its knitting and let them get on with it. We don't need a state-backed magazine publisher any more than we need state supermarkets.

One huge asset that BBC Worldwide has is the BBC brand, which to many people signifies both accuracy and quality. Partly because of that, BBC Worldwide is booming, with profits last year of £118m on a turnover of £916m. Nevertheless, it is clearly a commercial enterprise rather than anything to do with the public interest, and it should be privatized (as we recommended here).

Certainly, if the new owners wanted to keep the BBC brand – and overcome the complaints that it is living off something that rightly belongs to taxpayers – they would have to pay generously for it. Let's start the bidding at £2bn; but I would guess that the final price would come out a lot higher than that, which would be good news for a cash-strapped public.