BBC Worldwide is blaming its wasted Kangaroo investment and its BBC.com build-out for a loss of over £30 million from its 2008/09 digital media activities….
That’s the bad news. Without those blips, overall digital media sales actually rose 56.2 percent to £34.2 million, thanks mainly to BBC.com’s controversial non-UK advertising making £10.2 million in their first full year.
But a £8.9 million writedown from closing operations including Kangaroo, the UK VOD JV with C4 and ITV (LSE: ITV) that was ultimately prohibited by the Competition Commission, meant the total digital loss tripled from £10.9 million to £31.7 million.
Even without that charge, the digital operating loss doubled from £10.9 million to £22.8 million (ie. BBCWW has invested heavily but is beginning to show some income promise).
— BBC.com: Big success on the ad sales front. But, after the initial investment, actual losses doubled from £5.7 million to £12 million. Reached an average 50 million monthly users so far this year, BBCWW says (Omniture data). Has been busily building out its ad sales execs in the US and globally, winning over 400 clients including British Airways, Lufthansa, HSBC, Microsoft (NSDQ: MSFT) and Nokia (NYSE: NOK). Debuted geo-targeted mobile ads in March. BBCWW announced it will now localise the site for different national markets.
— BBC Motion Gallery: The video respository saw 28 percent better online sales of £14 million, but actual losses widened from £600,000 to £2 million after US sales collapsed, BBCWW restructured the operation and wrote off assets.
— Syndication: Income from distribution to channels like YouTube, MySpace and Babelgum grew grew from £7 million to £10 million but, again, the actual loss doubled from £4.6 million to £8.8 million.
— Kangaroo: BBCWW says the JV cost it £9.1 million to close (recorded in the total £8.9 million writedown). BBCWW says it’s “now exploring other ways of exploiting commercial TV rights on the internet, both in the UK and internationally”.
— ‘Passion sites’: They’re no longer being called that, after their management was restructured in April, and neither is BBCWW stating income for its vertical sites (bbcgoodfood.com, radiotimes.com, topgear.com, gardenersworld.com and lonelyplanet.com). Loneyplanet.com traffic has 5.5 million monthly uniques, bbcgoodfood.com traffic rose 94 percent.
Across the company, BBCWW sales grew 9.5 percent to £1.004 billion, but profit before writedowns fell 13.8 percent to £103 million.