Posted Sunday, October 5, 2003; 12.48BST
At least one company in another sector has found an abuse: RM, the software publisher. After the BBC finished studying the educational market, it submitted its digital curriculum plans in 2002 for government approval. At that point it should have waited for an answer before proceeding. But RM discovered that the BBC was continuing its work, even holding talks with a potential distribution partner, before it got the government's go-ahead. RM filed suit and after several days in court last October, the BBC backed down and officially apologized. In January, the head of its educational unit resigned, saying he had made "an error of judgment." RM's Hemmings says that, once the problem was identified, BBC management was "vigorous and rigorous" in dealing with it. But he adds: "You have to ask why they acted only after someone pointed out the issue."

As the BBC is Britain's most important cultural institution, its operations are subject to frequent scrutiny, including the charter review. In the 1980s, the government of then-Prime Minister Margaret Thatcher started a debate about the merits of commercializing the Corporation. The discussion spurred the BBC to become more businesslike. It took over the collection of the license fee from the Home Office, and it put in place a competitive bidding process: when a BBC department needed a service, it was no longer obliged to use the in-house option. By the time of the 1996 charter review, the idea that the BBC should generate its own cash had taken root. The first BBC facilities — including TV studios and costumes — were opened to external use in 1998 and told to function like real-world businesses.

Then, in 1999, came an official report into future funding. The government was eager for the BBC to take the lead in promoting digital television, and the BBC demanded a big hike in the license fee as its price. (It has since launched nine new channels.) The report, by an independent panel headed by economist Gavyn Davies, recommended instead that the BBC's prime source of new funding should come from "self-help" — efficiency savings and commercial revenues. Davies, who became chairman of the BBC board of governors in 2001, has presided with Dyke over the transformation of the BBC into a far more commercial-minded organization. Its government-set target: €1.6 billion in savings and income from commercial services by 2007.

That's a big goal, and to help meet it the BBC is exploiting the commercial opportunities of programs like The Blue Planet. Since it first aired in 2001, the breathtaking series about the world's oceans — a coproduction with the Discovery Channel — has become a franchise. "Two years before it was delivered, we saw the footage and said, 'We've got a cracker on our hands,'" recalls Alix Tidmarsh, the director of intellectual property management at BBC Worldwide. Some 500,000 copies of tie-ins have been sold to date, and 1 million videos and DVDs. A concert of Blue Planet music premiered at the Royal Festival Hall in 2001 and has since been performed at the Hollywood Bowl. And a 90-minute feature-film version, Deep Blue, with a score performed by the Berlin Philharmonic, had its premiere at the San Sebastián Film Festival in Spain last month. There's also been some merchandising, mainly of calendars, but the BBC decided against toys. "There are already lots of little stuffed dolphins on the market," Tidmarsh says. Retail sales to date from Blue Planet across all media: €43 million.

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