The loneliness of the overvalued publisher

The story that broke yesterday that the BBC is close to the sale of a majority stake in its travel brand Lonely Planet, will be seen as further proof that the Beeb's acquisition of the travel publisher five years ago was a mistake. Given what has happened in travel publishing over the past half-decade, and the price paid by the broadcaster, the headlines are not difficult to imagine. Skift, which broke the news of the sale, ran a follow-up piece immediately, titled: "The tortured history of Lonely Planet under BBC".

"Tortured" seems a peculiarly ill-advised word.

BBC Worldwide bought an initial 75% stake in Lonely Planet for £88.1m in 2007, and then paid a further £42.1m for the remaining stake in 2011. It then wrote down the value of that investment (of £130m.2m) by £50m, and though this was blamed on the high value of the Australian dollar, no-one was listening. Partly this was because the travel-guide market has fallen so dramatically in the five years since the LP acquisition (in the UK it has lost £51m in value), but secondly because of growing fears about how any travel publisher would make money from its content in the digital age. Google bought the US travel publisher Frommer's for $23m in 2012, at roughly one-times its turnover the valuation was significantly less than that put on LP by the BBC (a Select Committee report later noted that LP's turnover at the time was £45m), with many expecting the giant search engine to integrate the travel data into its search results, as it had previously done with Zagat's, as well as license content.

The BBC made mistakes, for sure. Its management clearly failed to comprehend early enough the pace at which digital would undermine traditional travel-guide publishing, and they appear not to have mitigated against the fact that much of this new digital content might be able for free.

The organisation also underestimated the ferocity of those rivals who wondered why a public service broadcaster needed to own a commercial travel publisher—even though the real enemy was all around and growing.

Yet I can't help feel that the BBC is being unfairly pilloried, partly because it overpaid, and partly because it was, well, the BBC, and therefore unable to complete its vision. We do not see the financial performance of LP, but it won't be pretty given what the write-down says about its costs, and the decline in the travel-book market, even though LP remains the market leader. But we do know that it was making the transition to digital, through its e-books, apps, and most importantly via its website. When it was bought by the BBC said it received 4.3 million visitors a month, that figure has since trebled.

Most crucially, though we may baulk at how it played out, the vision of putting the BBC and LP under one virtual roof still looks compelling. Combining the BBC's digital know-how, its wealth of content, historical and up-to-date reports from across the globe, with Lonely Planet's brand, its publishing nous and its reach, still looks unbeatable. The entity could have offered a true unbiased constantly updated window on the world, powered by trusted content and embellished by social interaction from the many travellers and observers attracted to such a portal. Were Google to pull off something similar, we would all be applauding.

The odd thing is that though many commentators point to the numbers, it wasn't these that killed the vision, it was the BBC bosses that could not resist the political fall-out from the deal, and clearly recognised that to take full advantage of such an asset would take the corportation into ever more dangerous activity (its commercial arm must be run at a distance). Yet ironically, had Google bought LP in 2007, would we have heard about the write-off? Of course not. Would we have had the same public hand-wringing from Sergey Brin, as we saw from BBC bosses when interviewed by the Select Committee. No. It would have quietly got about its business in a way the BBC was never able to.

If the reclusive Kentucky billionaire Brad Kelley does get his hands on Lonely Planet we may well be in for an equally interesting trip. And though I can understand why companies such as Rough Guides and Time Out felt so aggrieved by the acquisition, I can't help but feel that—should a sale go through—we (the BBC and the UK publishing business) would have lost another opportunity to build something good and useful out of the assets we spent so long building. In the end we will be pilloried for that too.



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