BBC must find more savings as popularity of streaming and mobile reduces television ownership and licence fee income
The BBC is to cut 1,000 jobs as it seeks to find £50 million in additional savings to cope with the expected drop in licence fee income caused by the growth of online viewing and decline in television ownership.
Forecasts suggest licence fee income will £150 million less than in 2011 as UK viewers turn away from televisions to their mobiles, iPlayer and other online video services which do not require a TV licence to view.
The broadcaster’s technology department is one of the areas where savings are expected to be made, with tech teams across digital, engineering and worldwide set to be joined up. The BBC will reduce management layers and number of managers, merge other divisions and improve processes, which will cause the headline job cuts.
BBC job cuts
New culture secretary John Whittingdale is a vocal opponent of the licence fee, which is currently ‘top-sliced’ to help pay for government broadband projects like Broadband Delivery UK (BDUK), although he expects the fee to remain in place until at least 2026.
The BBC’s royal charter and licence fee is currently up for renewal and Director General Tony Hall says the online challenges facing the corporation and the tough cost cutting measures that have been undertaken highlight the need for the fee to be modernised to cover digital services.
“A simpler, leaner, BBC is the right thing to do and it can also help us meet the financial challenges we face,” he said. “We’ve already significantly cut the costs of running the BBC, but in times of very tough choices we need to focus on what really matters – delivering outstanding programmes and content for all our audiences.”
Ofcom’s public service broadcasting review has also been published today and claims just 50 percent of viewing among 16-24 year olds is through live television despite 79 percent of people believing public service broadcasters (PSBs) like the BBC and Channel 4 deliver on their purpose.
The regulator said PSBs make a significant contribution to content creation in the UK, spending £2 billion excluding sport each year compared to £250 million by non-PSBs. It says PSBs benefit from advantages like valuable spectrum and prominent channel guide positions, but also acknowledges the growing threat from online services.