Licence payers will pick up bill

The BBC will spend £3.5 billion of licence payers' money to realise its digital dream.

The corporation has already shelled out at least £700 million in the five years since Lord Birt launched the digital empire with News 24. It will spend another £420million over 12 years on marketing and distributing the channels.

That comes on top of the £2.4 billion the corporation has already reckoned on spending on new digital channels including BBC Choice, BBC4, CBeebies and CBBC.

Director of marketing Andy Duncan confirmed today that the corporation will spend £200million a year on programming for the channels. But the investment required will rise considerably now the BBC is not only a programme supplier but a platform operator.

He told website Mediaguardian: "This is really about getting our content to millions more households for a marginal extra cost. We will be spending between £30million and £35 million annually on distribution and marketing, which is less than 1.5 per cent of our total licence fee income."

The £35million a year is a sharp rise on the £20 million a year the BBC had already said it was spending on marketing digital channels.

The money dwarfs the marketing budgets of giants such as Coca-Cola, which spent £15.6million on advertising in the UK last year.

The corporation acknowledges that it faces an uphill task to raise confidence in terrestrial digital television following the ITV Digital debacle but it is hoping it can persuade the two million former ITV Digital viewers that it is worth trying again.

Mr Duncan said: "It's a tough but challenging brief but ultimately we have a clear and simple proposition. We want to emphasise that this is a fresh start. You pay for your box and then you never have to pay again."