The BBC is facing increasing challenges from commercial competitors including Netflix, Amazon and independent television channels. So its commercial work ,which can help fund its public service broadcasting, is working in an increasingly competitive market. Through its commercial activities the BBC seeks to deliver additional value for licence fee payers by providing extra funding for BBC programmes, by contributing to the BBC’s Public Purposes, and by promoting the BBC brand around the world. The commercial performance of these activities has been flat in recent years and the BBC faces significant risks to future performance arising from changing audience behaviour as people spend less time watching TV channels and buy fewer DVDs, while increasingly streaming programmes digitally via subscription video on demand services. The BBC has the challenge of striking the right balance between immediate UK audience needs, which must always be its primary focus, and creating programmes and other ventures that can be commercially successful and appealing to international markets. The twin roles of the newly-merged BBC Studios commercial subsidiary—both making content for UK audiences and generating financial returns from sales—mean that it is now crucially important to the future success of the BBC as a whole. The licence fee payer, therefore, has a fundamental interest in the value that the BBC’s commercial activities deliver, for which the BBC Board is accountable. BBC Director-General Lord Hall is clear that quality programmes will ensure commercial survival but this will be severely tested in the next few years. This report is the Committee’s first on the BBC’s commercial activities, but we expect to look at them regularly in the coming years.
Published: 6 July 2018