Case Study: BBC Technology plays the beautiful game - March 2004  

Craig Dwyer

A company that is thought to be currently on the shopping lists of several major IT companies, BBC Technology - a wholly-owned commercial subsidiary of the UK's leading public service broadcaster the BBC - has been up for a sale since December 2003. Sport and Technology's editor Rachael Church examines what the successful purchaser will get in return for its bucks.

Formed in April 2001, BBC Technology (BBCT) currently sits as part of the BBC Ventures Group of companies that includes BBC Resources, BBC Broadcast and BBC Vecta. The company designs, builds and operates solutions for creating, managing and distributing content across all broadcast, digital media and interactive platforms - both for the BBC and other global players. The company will be sold as a complete entity by the end of August 2004 to one of a number of parties that have expressed an interest, including - it is rumoured - EDS, Microsoft, Capita, Accenture, IBM, Logica and HP. At the time of going to press, Fujitsu had pulled out of the race according to a Sport and Technology source. The move to sell up followed a strategic review of the BBC's technology requirements for the next decade which identified potential annual savings for the BBC of between $37m-$56m if its technology services were outsourced. Savings galore for a broadcaster that in 1999 famously clamped down on staff expense accounts and banned croissants and biscuits from meetings in a cost reduction drive initiated by the (then) director general Greg Dyke.
The BBC has not said how much it expects BBCT to sell for, but media outlets in the UK have reported the sale could be worth more than $190m, with contracts valued at $4.5bn. Despite its decision to sell, the BBC maintains that BBCT is profitable. "In the last financial year, the company delivered revenues of £220m [$411m] and profits of £7m [$13m], both forecast to grow over the next five years," confirmed Craig Dwyer, BBC Technology's chief marketing officer.

Lucrative contracts

"The money being asked for BBCT is a bargain," according to a Sport and Technology source that looked at buying the company, "in terms of what contracts are in place." Indeed, the company that buys BBCT will not only take over the latter's 10 year contract with the BBC to supply the broadcaster with technology support, including hosting of one of the UK's most trafficked websites (bbc.co.uk) which will provide inaugural broadband coverage of the 2004 Athens Olympics in August, but it will no doubt salivate over several other lucrative projects that BBCT has secured. "The successful company will purchase BBC Technology not only to supply the existing contracts, but hopefully to take the company on to leverage what we have been developing already," adds Dwyer.
BBCT projects already completed or in-progress include:

• managing the production of 3G audio-visual content for Hutchison 3G UK (3) (see below) as well as TV channels ITN and MTV;

• delivering customised broadcast control software for BSkyB, Granada/LWT and APTN in the UK, UPCtv and RUV in Europe and DirecTV in the US;

• providing a permanent satellite uplink for TVNZ's European contribution feeds;

• working as hosting and streaming partner for the RealNetworks' Real One SuperPass Subscription Service;

• providing hosting and streaming services to broadcast the Indian home cricket series, live on the internet for Wisden, and the West Indies versus India series for BSkyB and Wisden;

• delivering consultancy expertise to assist Fox Television Network with its implementation of media asset management strategies.

BBCT developed the technical infrastructure for the BBC's Wimbledon Tennis interactive service in 2003 and provided the same five channel automated playout area for the interactive coverage of the British Open golf championships in that year. During the Open, a BBCT project team supported BBC New Media in delivering the interactive service for BBC Sport, by providing video and audio compression, statistical multiplexing and the insertion of application data and monitoring. BBCT also provided full coverage of the Open by delivering the audio streaming on bbc.co.uk/fivelive and on bbc.co.uk/open.
One of BBCT's biggest initiatives is helping to build ESPN's Digital Centre, a two-year building and technology project scheduled to be completed in second quarter 2004 at the US network's headquarters. The project has meant adapting BBCT's own Colledia platform. "Colledia was designed to fulfil the scale and openness required for the BBC but has been scaled and fitted to address ESPN's specific needs," explains Dwyer.

The Colledia platform

Colledia offers 'media lifecycle management' - the ability to manage the whole broadcast and production process on a single, digital platform. Colledia uses open industry standards (MOS, AAF, MPEG, SMEF) and technology standards (XML, J2EE, Corba) so it integrates with components from vendor components such as Quantel. Colledia is used to manage and automate the contemporary sport production process and combines tools for ingest, storage and access with specific tools that make media workflows automated. The platform supports enterprise-wide, integrated workflow for real-time production and the full implementation offers full-scale transmission by both conventional broadcasting and the internet. In either interface, journalists can edit text, audio and video as well as create graphics at the desktop and assign the item to particular users as required or store it on a 'virtual shelf' for later use. "A major step has been to unify disparate systems and change the architecture of the systems to grab assets," says Dwyer, commenting on Colledia's strengths. "We have done this both flexibly and cost effectively."

3G soccer

BBCT is particularly proud of its relationship with UK 3G network operator Hutchison 3, for which it produces a Premiership soccer service. Bullishly, 3 signed a $65m deal with the FA Premier League in June 2001 to stream video clips with audio of goals and highlights from important Premiership matches. Further, it has signed a new three-season mobile rights deal starting with the 2004-05 season and running through to the 2006-07 season, which it is sharing with fellow UK mobile operator Vodafone. The rights will give both Vodafone and 3 customers access via their mobile phones to all 380 FA Premier League matches each season. The services will include exclusive video match highlights, previews, archive footage and Premiership round-ups as well as other services such as audio bulletins, 'near-live' picture messages and match scores. A 3 UK spokesman says the two companies will split the costs of the mobile broadcasts down the middle.
"We became involved with 3 around 18 months ago," explains Dwyer, "while they were preparing for the launch of their 3G services. They looked for someone to help them manage the rich media that they wanted to publish on their handsets. Their research indicated that consumers not only wanted good quality video, but they wanted to get it quickly."
It was a real 'chicken and egg' scenario for BBCT because the company had to start developing the technology for the service before the first 3G handsets were even available. "That was certainly a challenge," says Stephen Desmond, who heads up the BBCT editorial team that provides the 3 service, and hosted a behind-the-scenes look at the technology for Sport and Technology.
Another challenge has been the issue of adapting a large screen shot to that for a small screen on a mobile phone adds Desmond. "It is tempting for broadcasters to take a large screen format and send it as it is to a small screen," he says, "but that doesn't always work. We make the effort to supply what will work best for the mobile environment." This involves cutting out irrelevant or unusable footage often on a frame-by-frame basis and zooming in on the action in a sequence that lasts 20 seconds and is delivered to 3's server complete with BBCT audio commentary. "Again, commentary has to be adapted for the small screen," explains Desmond, "because the audio for the main television coverage might not work with the footage we choose."
Desmond and his team have to choose five clips per match for 3's customers as well as producing half-time and full-time highlights packages. This can be a tricky proposition in a match that is goalless or has more exciting action in one half rather than the other. "Under 3's current agreement with the Premier League, our hands are slightly tied in terms of what we can produce," adds Desmond. "But we are looking forward to the new contract next season which will allow us greater flexibility."
"This whole service is about schedule management," adds Megan Wyndham from the BBCT 3G production team, "and we treat the whole process more like programming than producing web content. It is all about managing a schedule and making sure it all goes to plan."
"Although we are providing this service for football [soccer]," says Desmond, "we could apply this technology and production technique to any sports event that requires a fast turnaround. The systems are already in place."

Sport at the core of BBCT

Looking ahead, Dwyer sees the "issues of rights management and security increasing in importance," as far as digital technology goes. "We have broadly set out our stall at BBC Technology which is building platforms that can be deployed at the heart of infrastructure," he adds. "I think that fundamentally broadcasters need to focus keenly on flexibility in their business models and content. Sport however will continue to be a driver of new services."
At the time of writing, BBCT was making headlines due to the sacking of its managing director because of an alleged 'misuse of hospitality' funds. The move undoubtedly must have further unsettled some of the 1,400 staff on BBCT's books who have all been promised contracts with the company's new owner, but who are understandably feeling rather insecure. BECTU, the union that represents BBCT workers, has already voiced its concern over the sale and recent events.
While it might be a few more months yet before BBCT's fate is sealed and therefore any concerns appeased, there is certainly plenty to be getting on with at BBCT HQ, and sport is firmly on the agenda.

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