The BBC has confirmed it’s seeking to make around £600m of cuts over the next three years.
The savings, which are in addition to an existing reduction of £500m over the past three years, will likely result in job losses and cuts to content.
Recent years has seen a persistent and pronounced reduction in the number of households willing to pay the Licence Fee which brings in around £3.8bn per year and is the BBC’s biggest source of funding.
It also generates more than £2bn annually through its commercial ventures which includes the UKTV portfolio of advert and subscription funded channels here in the UK, the Britbox streaming service, a subscription podcast service, a paid News website for US audiences, and additional advert and subscription funded broadcast and streaming channels outside the UK.
In addition to these activities it owns a global production and distribution business which makes shows for rival broadcasters and streamers and is the owner of various production companies behind cinema hits such Conclave and The Lost King.
While the BBC remains the UK’s most trusted news source and its dramas and comedies are among the most nation’s favourite and most watched shows, it is has repeatedly been criticised for high profile examples of wasteful spending.
For example, the building of a new EastEnders set went £27m over budget and led MPs on the Public Accounts Committee to label the broadcaster “complacent” in its handling of the project, while the failed Digital Media Initiative project wasted over £100m without delivering a viable product.
Additionally, despite vocal criticisms, it took years to tackle the culture of high presenter pay and continues to launch new channels and services while complaining about falling income.
It also continues to compete with commercial broadcasters by using the Licence Fee to buy in US series and films which would be readily picked up by any other channel or service, thereby reducing the amount of money available for investing in UK-produced content.
And while viewers are increasingly moving to streaming, the BBC’s iPlayer is failing to keep up, for example by restricting sound to just 2 channel stereo, placing a large onscreen logo on all content and withholding 4K from multiple devices – potentially making the service less attractive to some audiences.
Despite complaining about falling Licence Fee revenues, the BBC has so far resisted calls to tie access to iPlayer to the holding of a valid TV licence, even though this would provide a much cheaper form of enforcement then the current £100m+ annual cost of TV Licensing’s door to door salesforce which is known for its aggressive tactics.
A series of recent Thematic Reviews commissioned by the BBC Board have found structural weaknesses in its coverage of key issues and how it represents the country, while Ofcom has identified deep dissatisfaction among audiences from lower income groups.
The broadcaster has suggested new ways for households to fund it, for example by suggesting a shift away from the Licence Fee in favour of a levy on Council Tax.
Other briefings ascribed to the BBC have centred on a broadband levy and extending the Licence Fee to cover streaming non-live content on services such as Netflix.
The Government is currently consulting on the future of the BBC and its funding, with ministers considering introducing a subscription for some services and forcing the BBC to close iPlayer to non-Licence Fee payers.