"The world marketplace is changing dramatically, and we have to have a different place in it," said Dick Emery, BBC Worldwide director of strategy & marketing.
This marks the beginning of a new direction for the BBC, the giant media corporation which now has several arms including non-commercial broadcasting and the newer BBC Worldwide unit, responsible for all commercial activities including TV, licensing and publishing.
Although some BBC programs are ad-supported in markets around the world, until now the programming has been sold to a foreign partner which sells the commercial time.
The BBC has never wrestled with such issues in Britain because revenues for programming on its two commercial-free U.K. channels, BBC1 and BBC2, flood in from annual licensing fees of $137, required of every household with a TV. Licensing fees totaled $2.7 billion in the fiscal year ended last March 31, as 20 million British households paid fees.
In Europe, the BBC is joining with Pearson, publisher of the Financial Times, to introduce two new TV stations. The BBC will provide the programming, and Pearson will pay for the $45 million introduction.
BBC1 and BBC2 have a combined share of 43% of the British TV market, but in order to grow globally, the BBC is expanding its advertising-supported media outside Britain.
The company's World Service Television, WSTV, seen in 141 countries, is accepting advertising. Advertisers can also find a home in most of the BBC's 17 magazines, such as BBC Music Magazine. Its U.S. edition has more than 200,000 subscribers. A German-language edition was introduced in October; local-language editions in France, Japan and China are planned for next year.
Merchandising is another area where the BBC is going commercial. The company has moved quickly to capitalize on the success of popular characters on its TV shows, such as Mr. Blobby, a live-action BBC TV character used this year to introduce more than 250 products from bubble bath to balloons.
"We have been signaling for some time the opportunity for the BBC to play a major role in the development of the multi-media environment now opening up worldwide," said Bob Phillis, 49, BBC deputy director-general.
The new European TV channels will be a test of whether the BBC can hack it in the cold world of competition. One channel, for example, will compete directly with CNN International and NBC Super Channel while the other will offer entertainment programming.
But the first challenge is signing up cable operators, said Mr. Emery, and to stir interest among viewers, a $7.5 million TV and print campaign by Saatchi & Saatchi Advertising will break early next year. The BBC hopes to build an audience of 10 million viewers for the news channel by the end of next year.
Still undecided are ad rates and exactly how many minutes will be sold. Mr. Emery said that because of legal restrictions, advertising will be kept under nine minutes per hour.
NBC Super Channel charges $2,000 for a 30-second slot in prime time.
Another new effort is the introduction of a U.S. advertiser-supported cable news channel that could start as early as next year, Mr. Emery said.
But the new channels are just the latest in the BBC's global expansion. In June, the BBC began producing a 24-hour subscription Arabic-language channel without advertiser support in the Middle East, the BBC Arabic Channel.
Starting in 1991 in Asia, ad-supported WSTV reaches 7 million Asian households. In 1992, the channel's reach was expanded to Africa as a subscription service without advertiser support, and on July 1, WSTV became available in Japan, funded mostly through subscriptions but it does carry some commercials.