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BBC boss sets out plans for cheaper and “digital-first” future

By | Published on Friday 27 May 2022


BBC boss Tim Davie yesterday set out his plan to build a “digital-first” British Broadcasting Corporation. The grand plan – which will see the broadcaster increasingly prioritise its apps and websites over traditional linear broadcast channels – is partly about future-proofing the organisation in a world where consumers increasingly expect media and entertainment to be online and on-demand, and partly about saving money after the UK government announced a two-year licence fee freeze.

That decision to freeze the licence fee paid by TV-owning households across the UK means that – because of inflation – the BBC will actually see its guaranteed income decline over the next two years, requiring significant savings.

After the two year freeze the licence fee should then increase each year in line with inflation, though the current government likes to talk about phasing out the licence fee entirely in the not too distant future, so it’s important for the Beeb to figure out cost-savings in the short-term and alternative funding models in the longer term.

Davie’s grand plan includes £200 million in cost savings – which covers a big chunk of what is required by the licence fee freeze – as well as the shifting of about £300 million around the organisation in order to become “digital-first”.

In a speech to staff yesterday, Davie said: “The market challenge is clear. Though broadcast channels will be essential for years to come, we are moving decisively to a largely on-demand world”.

And while the BBC has often been an innovator and pioneer when it comes to on-demand digital content, most of its audience still consumes most of its output via traditional TV and radio channels and stations. Meanwhile, of those consuming content online, only a minority are formally logging in when using the BBC’s online services.

Of course, you could argue that just shows that the average viewer prefers conventional channels and doesn’t want to have to sign in – and, because of its licence fee funding, the BBC needs to be seen to giving the people what they want. However, Davie seems to think, as the future of media in general is on-demand – and the BBC’s future specifically might ultimately become subscription fee based – it needs to slowly encourage its audience to move to on-demand subscription services.

“Today around 85% of the time people spend with the BBC is with linear broadcasts”, he revealed yesterday. “Too many of our resources are focused on broadcast and not online. And less than 10% of our usage is signed in, so we can’t offer a properly tailored service, unlike all our global competitors. If we do not respond faster to these changes we will cede too much ground to those who are not driven by public service values”.

“The vision is simple”, he added, “from today we are going to move decisively to a digital-first BBC. We have a chance to do something that no one else is doing: build a digital media organisation that makes a significant positive impact, culturally, economically and socially. A global leader driven by the search for truth, impartiality, outstanding creativity, and independence”.

And that basically means “reallocating money towards content that works in the on-demand world, making tough choices on traditional distribution, and investing more in online services”.

In practical terms, that will mean more content created with iPlayer specifically in mind, rather than the video-on-demand platform simply being a repository for shows commissioned for specific BBC channels. Davie will also look to secure changes to the BBC specific rules that restrict its ability to exploit its vast archives on the video-on-demand service.

And when it comes to music and audio, the BBC Sounds app will become the priority. “In audio, we will accelerate digital growth, moving more of the 34 million people who listen weekly to linear radio stations to become habitual users of BBC Sounds”, he declared.

“We want Sounds to remain one of the top two digital audio services in the UK”, he went on. “To make this happen, we are reorganising all our network radio commissioning to work better as speech and music portfolios, bringing broadcast and on-demand content together. We will simplify some schedules and cancel some shows where linear and on-demand performance is not delivering”.

And the Sounds app will continue to evolve, Davie confirmed, even if such evolution usually results in criticism from the BBC’s commercial rivals.

“In Sounds, we will continue to improve our on-demand music offer”, he said. “We will showcase some of the best non-BBC podcasts from British creators and host more of our podcasts on Sounds first, before distributing more widely. We want to deliver local and network news better across Sounds and ensure we are securing distribution in connected cars”.

In terms of saving money, the BBC will slowly reduce the number of hours of original programming it makes for its TV channels and radio stations, the idea being that – as on-demand becomes the priority – less effort, and money, will be put into making original content to fill air-time hours where relatively small audiences are actually tuning in live. In terms of TV, that will mean about 200 hours less original content a year.

“We will focus our money where we are distinctive and more uniquely BBC”, Davie added. “We will make tough choices about titles which may be performing on linear but are not doing enough to drive viewers to on-demand. A number of them will be cancelled this year. Importantly, higher-impact content will attract more investment from third parties to make our money go further”.

Longer term, the number of traditional linear TV channels and radio stations will also be reduced, with certain channels and stations becoming online and on-demand only. Davie specifically mentioned BBC Four, CBBC and Radio 4 Extra as channels and stations likely to become online and on-demand only first.

Of course the BBC previously took its youth channel BBC Three online only and then brought it back as a linear channel earlier this year, suggesting that approach didn’t really work. However, longer term, an increasing number of BBC brands becoming on-demand only does now feel inevitable.

Another area where cost savings will be sought directly relates to music and specifically classical music. “While we will continue to play a vital role in classical music in this country”, Davie said, “we must be realistic about the resources we use. We will continue to support the classical music sector, invest in Radio 3 and improve our educational impact. However, we will look to reduce licence fee funding in our performing groups – preferably by looking for alternative sources of income where possible”.

Further cost savings will come from offloading some property and, alas, a further down-sizing of the work-force. Davie said that the number of people working for the core BBC organisation will be reduced by about 6% in the years ahead. Although he also plans to grow the separate commercial wing of the Corporation, so some of that will involve people moving from licence fee funded to commercial operations. Nevertheless, there will be cut-backs in terms of headcount which will likely prove controversial.

“This is our moment to build a digital-first BBC”, he then said, seeking to rally the understandably nervous troops. “Independent, impartial, constantly innovating and serving all. A fresh, new, global digital media organisation which has never been seen before. Solely driven by the desire to make life and society better for our licence fee payers and customers in every corner of the UK and beyond”.

“They want us to keep the BBC relevant and fight for something that in 2022 is more important than ever”, he concluded. “To do that we need to evolve faster and embrace the huge shifts in the market around us. I believe in a public service BBC for all, properly funded, relevant for everyone, universally available, and growing in the on-demand age. This plan sets us on that journey”.