The BBC is to cut around 2,000 jobs – 10% of the workforce – in its latest attempt to rein in spending.
Overheads have already been cut by around half a billion pounds over the past three years and managers, who are seeking to align spending with declining levels of Licence Fee income, recently set out plans to save a further £600m from its roughly £5bn annual running costs over the next three.
Details of the latest spending cuts were set out on Wednesday by interim director general Rhodri Talfan Davies who is running the organisation until the arrival of Matt Brittin next month.
Talfan Davies is also restricting spending on the use of management consultancies and attendance at conferences, awards and events – all areas of highly discretionary spending which Licence Fee payers might have already expected was being kept to an absolute minimum.
While the BBC has a successful commercial arm, including a highly profitable portfolio of advert and subscription funded channels here in the UK, the Licence Fee remains its biggest source of income.
Once inescapable, the fee is now an increasingly discretionary cost for households who can legitimately watch on-demand content from any streaming service other than iPlayer without falling into scope of the £180 annual charge.
Accordingly, the numbers paying has fallen in recent years as audiences turn away from watching traditional linear broadcasts and look to streamers such as Disney+, Apple TV and Netflix – whose catalogues include major UK productions – for their entertainment.
Subscribing to such services and cancelling once they’re no longer required is a much quicker and easier experience than buying and managing a TV Licence.
Whereas streaming services offer easy contract free sign-ups and ‘one-click’ cancellations, it’s impossible to buy a TV Licence to just cover a single month’s viewing.
Instead viewers must agree to buy a whole year’s licence and then, if they stop watching content covered by the fee before the year’s end, complete an online application to cancel it and request any refund they might be entitled to.
Such barriers potentially risk deterring people who might need a Licence for just part of the year from buying one.
Despite the obvious benefits to its finances and the relative ease of doing so, the BBC has so far resisted making it impossible to use iPlayer without holding a valid licence, with managers seemingly reluctant to do anything which makes the fee look even more like a BBC subscription than it already does.
And even though there’s a consistent rise in the number of viewers who stream all or most of their TV viewing, the BBC has failed to ensure iPlayer keeps pace with the experiences audiences can enjoy on other paid-for streaming services – for example, while rivals routinely offer 5.1 stereo and Dolby Atmos, sound on iPlayer is limited to basic two-channel stereo.
While the service does offer some 4K content, this is actively withheld from many 4K-capable TVs and streaming devices and lacks advanced features – such as Dolby Vision – offered by the likes of Netflix and Apple TV.
It’s also been slower than rivals to venture beyond its own services and meet audiences on the platforms they already use, waiting until the latest Charter review to announce it will follow the example of both ITV and Channel 4 and make new and original content available to audiences via YouTube.
The BBC recently used the government’s ongoing review of its finances and operations to call for a new universal charge to be levied on all households regardless of whether they use its services.