The Beeb Cashes In

The

big icons of the small screen aren't so much on network television these days as they are on cable, where characters like Larry David, Tony Soprano and David Brent exist. Wait, who's Brent? If you have to ask, you haven't seen The Office, the British comedy airing on the cable channel BBC America. An absurdist mockumentary, The Office is a critical and popular smash in Britain. And with its second season premiering in the U.S. this month, it has claimed a cult following and turned Brent, played by British actor Ricky Gervais, into a hit with the media cognoscenti. A couple of weeks ago, in New York City, Gervais was interviewed on TV by a flattering David Letterman and afterward headed downtown to a screening of the show and a Q. and A. with the audience, which included a die-hard fan, the singer-songwriter Moby.

The Office is one of several shows that should help BBC America become profitable within the next 18 months. The British Broadcasting Corp. (BBC) launched BBCA five years ago to liven up the Beeb's image in the U.S., export more British culture and, since it runs ads, turn a profit. BBCA is the Beeb's low-rent cousin.

In Britain, Auntie, as the network is known, is the nation's high-minded public broadcaster, 81 years old and going strong with award-winning news, documentaries, dramas and comedies. It has long snubbed crass commerce and does not run ads on its two flagship channels. Its revenue model: every household with a telly must pay the British government a "license fee" of nearly $200 a year to fund the BBC, which adds up to a $4.5 billion annual subsidy. Americans would probably dump their sets in the Boston harbor if Washington forced them to spend that kind of money for PBS. But by and large, Brits love their Beeb; 93% tune in at least once a week. Audience satisfaction, which started at 6.4 (out of 10) when it was first measured in 2000, peaked at 7.1 this year.

Old Auntie, however, is not being treated with deference in its homeland. It's partly political — the company is feuding with the government over a BBC news broadcast that suggested Prime Minister Tony Blair exaggerated Iraq's military threat to justify going to war. It's partly corporate — the BBC, through its commercial side, is turning into a powerful media conglomerate. Some critics say the BBC is dumbing down its entertainment shows to get ratings and sexing up some of its news broadcasts to get buzz. With new digital-TV and radio channels, a highly successful website, a major international expansion — to say nothing of the fight with the government that provides much of its money and is about to rework its charter--"the BBC is having to justify itself in too many directions at once," says Anthony Smith, president of Magdalen College, Oxford, and a former BBC producer. Commercial media rivals like News Corp, which controls the satellite-TV network Sky, vent that the BBC's subsidy gives it an unfair advantage with which to expand into their territory. "The BBC is probably under more hostile attack than it ever has been in its history," says Steven Barnett, a professor of communications at the University of Westminster.

Part of the hostility may come down to sour grapes. Last year the Beeb's for-profit operations, which are separate legal entities, brought in revenues of $1.9 billion--35% higher than in 2000--and returned $249 million to the BBC's not-for-profit side. That's remarkable, considering that during the same period, many of the world's major media firms struggled with slumping ad revenues, large debt loads and expensive mergers that blew up. But the Beeb more than muddled through, and one of its biggest success stories is right here in America.

If you want to see the future of the Beeb as media giant, click on BBC America, which runs on digital cable and the satellite service EchoStar. BBCA is now available in 37 million homes, up from 28 million only last year. The channel airs BBC hits from Britain, such as Changing Rooms and The Office; it imports popular programs that other British broadcasters run, like the talk show So Graham Norton; and it's creating American spin-offs. An import called Ground Force, on which professional gardeners fix up a bloke's backyard, also airs as an American version with a team of gardeners digging up backyards in places like New Orleans, Miami and Bordentown, N.J. It's one of the channel's biggest hits, with a prime-time audience of about 350,000 viewers, says Paul Lee, CEO of BBCA. That may seem tiny, but it's substantial, considering that BBCA is available in about one-third of American households and resides in the hinterlands on many cable systems' lineups.

"We're a buzz network," says Lee, 42, a former BBC director and producer. "When we were in under 30 million homes, there weren't a lot of advertisers who noticed. But we're really getting noticed now." Lee says the BBC's prime-time ratings have grown 50% year over year since 2001. "When we launched, only 3 in 10 Americans heard of the BBC. That figure is now 6 in 10." He says BBCA is ahead of its target to turn a profit.