The BBC is a media organization that inspires tremendous amounts of jealousy within the media industry because of its huge budget collected from all UK TV viewers, and backed up by the law.

This steady income means that the BBC has been insulated from many of the travails plaguing other media organizations as they struggle to transition to an online business model and smaller revenues.

However, the UK government has said that the BBC license will be frozen for 6 years at 145.50 pounds (US$231) per year, representing a 16% cut in its budget.

The BBC this week announced that its online budget will be reduced by 25% resulting in the following cuts:

– The closure of half of the 400 Top Level Domains (with 180 closing ahead of schedule later this year)

– The replacement of the majority of programme websites with automated content

– The closure of the 606 community site and the closure of the BBC iPlayer message board

…

BBC Online will not:

– Launch its own social network

– Offer specialist news content for specialist audiences

– Publish local listings

– Develop encyclopaedic propositions in Knowledge

– Provide continuing professional development materials for teachers or a managed learning environment for schools

– Become a video-on-demand aggregator in BBC iPlayer, although it will link to other on-demand providers.

This will result in savings of £34m from £137m today to £103m by 2013/14.

Foremski’s Take:

It seems strange that the BBC is closing so many community sites and moving away from specialist sites because the Internet rewards those media organizations that specialize in this way.

But this does open the door to other media organizations to take advantage of those holes in BBC coverage and it removes a competitor, the BBC, which has a clear market advantage.

However, instead of closing so many community sites why not just gift those sites to those communities? Since the infrastructure has already been set up, it wouldn’t take much for communities to run those sites themselves–server and bandwidth costs would be negligible. After all, it was the UK tax payers in those communities that funded the community sites, surely it would be better to gift those sites to those communities rather than closing them down.

(Hat tip to @moon.)

[Cross-posted at Silicon Valley Watcher]