Shaking up the Beeb

By Helen Gibson/London

Morale at the BBC, the world's best-known public-service broadcaster, has been dropping for most of the past decade. A "moaning culture," in the words of Greg Dyke, the British Broadcasting Corp.'s new director-general, has pervaded the Beeb in recent years, with staff members complaining about an overweening bureaucracy that stifles creativity. Last month it appeared that Dyke had taken the keening to heart. He announced a shake-up of the 23,000-employee organization in which hundreds of management jobs will be axed and $1.5 billion in savings channeled into programming over the next five years.

For foreigners, who mostly consume the best the BBC has to offer, like the costume drama Wives and Daughters and the comedy series Absolutely Fabulous, the need for an overhaul might seem less than compelling. But for those who labor in the main offices, Dyke's description of the organization as being overmanaged and underled could seem a euphemism. During his seven-year reign, Dyke's predecessor John Birt created an unpopular and labyrinthine business bureaucracy in which 190 separate units handled interdepartmental dealings, especially those between the program commissioning and production sides. The Birt system was designed to instill accountability into an organization that got $3.4 billion of its $4.5 billion in annual revenues from a license fee levied on every TV-owning household, and had little respect for budgetary discipline. But the pendulum swung too far. Under Birt, as every department had to justify its costs, transfer pricing ballooned, and it became cheaper to go out and buy a music recording than to take it out of the BBC library.

Dyke seems just the man to knock a new sensibility into the sprawling bureaucracy. He comes from a commercial TV background--he was chairman and chief executive of Pearson Television from 1995 to 1999 after leaving London Weekend Television, where he was group chief executive from 1990 to 1994--and is, according to Jonathan Davis, media expert at the London Economics consultancy, "the hardest-nosed businessman in the British-TV industry." Dyke prefers to stress his high aspirations for the Beeb, telling his staff last month, "Our aim is to be a place where people work collaboratively, enjoy their job and are inspired and united behind a common purpose--to create great television and radio programs."

The BBC still does both, and its audience appreciates it. Every Briton watches or listens to the BBC an average of more than 40 hours a week. The quality of costume dramas like Pride and Prejudice or science series like the recent Walking with Dinosaurs has made BBC programming an export item worth more than $200 million a year. The corporation has even succeeded in new media--BBC Online is Europe's most-visited information Internet site.

But competition has taken a toll. Gone are the days when there were only four broadcast TV channels on offer in Britain, two of which belonged to the Beeb. Audiences with digital services can now choose from as many as 200 channels. The BBC, which always has to juggle the need for ratings with its public-service role, has found it hugely expensive to launch digital channels, start Internet sites and cope with the spiraling costs of technology, talent and rights to broadcast such things as sporting events. Although sport is one of Dyke's priorities, he has already ruled out paying the vast sums being demanded to broadcast England's top Premier League football games live--the price is expected to be more than double the $1.18 billion broadcasters paid in 1996. "We cannot just collect money from license payers to give it to footballers," he said. Rupert Murdoch-controlled, pay-TV group British Sky Broadcasting, which invested more than $1 billion for the rights to broadcast 60 live games each season through 2000-01, is determined to keep Premier League football.

Dyke thinks he can boost revenues by further developing the BBC's filmmaking potential, among other things. The BBC has already successfully released Mrs. Brown, which starred Judi Dench as Queen Victoria. The film earned her an Oscar nomination and the BBC $15 million worldwide. There are plans to seek joint ventures for other films, probably with U.S. studios and distributors.

The BBC is the cornerstone of a significant British audiovisual industry, in which about $6 billion a year is spent on making TV programs that in turn earn some $700 million in export revenues. Says media expert Davis: "In the BBC, Britain probably has one of the most powerful, dynamic and aggressive public-sector businesses anywhere in Europe and maybe in the world." Dyke plans to make the venerable institution leaner, meaner and much more dynamic.