Culture Secretary Lisa Nandy met with Matt Brittin, the BBC’s incoming Director General, yesterday to discuss how the broadcaster can be put “on a sound financial footing”.
Nandy revealed the meeting on Thursday while appearing before MPs at the regular session of questions to her department.
The meeting came on the same day the BBC announced that 2,000 jobs would be axed as part of efforts to save £600m from its roughly £5bn annual running costs over the next three years.
Spending on management consultancies and attendance at conferences, awards and events is also set to be scaled back as the broadcaster struggles to match its outgoings with falling levels of Licence Fee revenue.
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.
However, the number of households willing to pay the £180 annual charge is in constant decline.
The fall is partly fuelled by the increasing popularity of streaming, with audiences able to legitimately watch on-demand content from any service other than iPlayer without falling into scope of the £180 annual charge.
The BBC’s peak time schedule is increasingly dominated by reality, light entertainment and ‘celebs on holiday’ style shows, increasing the risk that it’ll continue loosing viewers to streamers whose offerings are more likely to be dominated by big budget original dramas and comedies, many of which – such as the widely acclaimed Rivals and Slow Horses – are filmed in the UK.
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 that it’ll follow the example of ITV and Channel 4 and make new content available to audiences via YouTube.
“Difficult choices” facing the BBC
Previous rounds of cuts have seen BBC managers ‘salami slice’ budgets in the hope audiences won’t notice the reductions.
However interim Director General Rhodri Talfan Davies yesterday suggested this approach may no longer be viable, telling the BBC’s Media Show that the scale of the coming cuts meant “there are going to be some big and some difficult choices” to be made.
A willingness to consider reducing the number of services the BBC operates would be a major change in policy given that it continues to launch new channels and services even as managers complain of falling income.
However, the BBC’s willingness to consider new ways of thinking appears to have its limits.
In response to the government’s ongoing review of its finances and operations, the BBC urged ministers to levy a new charge on all households regardless of whether they use its services – effectively recreating the days when buying a TV Licence was an inescapable fact of life.