Remaking Auntie

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Morale at 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 Corporation's new Director-General--has pervaded the Beeb in recent years, with staff members complaining about an overweening bureaucracy that stifled creativity. Last week it appeared that Dyke had taken the criticisms to heart. He announced a major shakeup of the 23,000-employee organization in which hundreds of management jobs will be axed and the savings channeled into programming.

After years of what he described as being over-managed and under-led, Dyke said the BBC will now focus on getting its administration costs down to release an extra annual $300 million over the next five years to make better programs. There is plenty of overhead to cut. Dyke's predecessor, John Birt, had instituted an unpopular and unwieldy internal market in which 190 business units handled trading between departments, and particularly between the program commissioning and production sides. The system, first launched in 1991, was designed to instill accountability into an organization which, shielded by the license fee from pressures faced by commercial TV, had little respect for budgetary discipline. But the pendulum swung too far and bureaucracy burgeoned. Under the Birt regime, it became cheaper to go out and buy a music recording than to take it out of the library.

The new man comes from a commercial television background and is, according to one media expert, "the hardest-nosed businessman in the U.K. TV industry." He told his staff: "Our aim is for the BBC 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. At home, every household watches or listens to the BBC for an average of over 40 hours a week. The quality of costume dramas like Pride and Prejudice or science series like the recent Walking with Dinosaurs sells these TV shows worldwide. It has even succeeded in new media--BBC Online is Europe's most-visited information Internet site.

Today, however, the BBC faces an increasingly competitive world. Gone are the days when there were only four terrestrial TV channels on offer, two of them BBC; audiences with digital services can now choose between up to 200 channels. And the BBC, always juggling the need for ratings with its public service role, has found it hugely expensive to launch new digital channels, start Internet sites and cope with the spiraling costs of technology, talent and sports rights.

Money constraints have meant that the BBC has lost the rights to broadcast many of Britain's big sporting events over the years. Although sport is one of Dyke's priorities, he ruled out paying the vast sums now being demanded to broadcast England's top Premier League football games live. "We cannot just collect money from license payers to give it to footballers," he said.

Dyke also thinks he can spend money to boost revenues by developing the BBC's film-making potential, undoubtedly mindful of competitor Channel 4's FilmFour and its success with such movies as Four Weddings and a Funeral. The BBC has already had successful releases of its own, including Mrs. Brown, which starred Judi Dench as Queen Victoria. The film earned her an Oscar nomination and the BBC $15 million worldwide.

The British public tends to take its beloved "Auntie" for granted, but Jonathan Davis, media expert at the London Economics consultancy, points out that the BBC is the cornerstone of a significant audiovisual industry in the U.K., where about $6 billion a year is spent on making TV programs. Says Davis, "In the BBC, the U.K. probably has one of the most powerful, dynamic and aggressive public sector businesses of anywhere in Europe and maybe in the world." Dyke obviously plans to make it leaner, meaner and much more dynamic.