Would you trust the BBC in New Media

The BBC has set up a Trust, headed up by ex BBC'er Patricia Hodgson, to oversee the BBC's spend in the digital media arena and see if it is in the public interest. The Torygraph digital editor, proxying in the Grauniad, is very vexercised over this:

So the baseline budget for 2007/2008 of £74.2m is bumped up to £114.4m - a healthy 54% increase at a time when the BBC's private sector rivals are feeling the full whiplash of a global credit crunch.

A bit of perspective on £114.4m: that's more than the combined digital budgets of all of Britain's national newspaper websites. And it's only the tip of the iceberg: it does not include the costs of bbc.com, the BBC's commercial international website, nor does it include much of the website's journalism costs, and nor does it take account of the BBC's juicy £400m "future media'' budget. So, in reality, the BBC has well in excess of £500m to spend on digital media - a big enough war chest to crush its rivals, should the BBC get its act together.

But of course, should rivals feel "overwhelmed by the scale of the BBC'' they can always appeal to an "independent'' panel - overseen by the BBC Trust - in a process that typically takes 18 months to two years.

But why should the public care? After all, if it leads to an even better website, then that's surely in the public interest.

Not so - unless you take the view that weakening the private sector news industry is in Britain's best interest.

Quite a few separate strands here.

Firstly, the size of the budget - c £500m. That is huge, and can potentially put paid to any aspiring startup in any space the BBC decides to enter. For that reason, since it is "our" money after all, I think it is incumbent on the BBC to use UK startups as much as possible. The Backstage Labs and Innovation program are excellent, but I think more could be done to nurture UK digital talent - the BBC as a customer could feed a whole ecosystem of startups. The UK's big skill over the US and Europe is digital media (as opposed to infrastructure or mobile per se) and the BBC could drive the UK to bat seriously above its weight.

(Update - Ian Betteridge notes in the comments that the BBC is mandated to spend 25% of its budget on UK companies - I knew that and forgot it - in fact they can spend more, as there are other discretionary inside/outside budgets as well)

Secondly, the criticism that BBC spend is greater than the ToryGraph, Grauniad etc' spend on digital media put together and could crush them. To me, that's more a reflection on the fact that the private companies are underspending in the space. If the BBC action forces them to open up the purse strings a bit more, that's another win-win for UK.com

Thirdly, as to keeping a private media sector being in Britain's best interest - two thoughts here:

(i) In nearly every media sector the reason the UK has such high quality is because the BBC is producing at a reasonable quality level - ie it keeps the private sector from devolving to the lowest common demographic, as occurs in other countries.

(ii) The private sector is not an automatic "good thing", it needs to earn that right - and right now it isn't - from republishing PR and calling it journalism, to scamming phone call ins, private sector media needs to do a bit more "log out of own eye" work to be automatically considered a Good Thing.

Fourthly - is 18 months to 2 years acceptable - no, but then I have seen many a private sector company use the law to spin things out for this long - even getting bills paid can take ages. Its a karma thing

The big question is - does the BBC scale hamper innovation? The answer - not directly, but it does scare people off areas that the BBC can get into. Why this is any different to competing with say Microsoft or Google is unclear to me though, its just like.

But if - as I suggest above - the BBC works with / uses some of the UK companies, and even possibly open its archive / R&D side for use, it could actually foster a vibrant ecosystem, not stifle it.