The majority of the BBC’s £1BN ($1.3BN) annual savings are set to come from content cuts this year, a five-fold increase since 2016/17, as the leading UK audit body raises significant concerns about the impact on viewers.
The National Audit Office’s (NAO) latest BBC report found £402M ($535M) is projected to be saved on “cuts to content and services” for the 2021/22 financial year and a further £103M ($137M) on “changes to scheduling mix,” meaning 52% of the organisation’s near-£1BN savings target will come via content.
The circa-£500M content saving has increased five-fold over the past few years, as the BBC has had to cut more and more of its program spend in order to meet hefty targets imposed during the last licence fee settlement in 2016/17. Rather than content, the majority (70%) of its annual savings used to come from “productivity” and by reducing staff numbers.
The BBC’s content spend has fallen by 12% in real terms since 2016/17, while number of acquired hours of shows such as Gossip Girl and Superman and Lois has doubled, although the NAO acknowledged these shifts are mainly due to the impact of Covid-19 on production.
Almost one-third of shows on BBC1 are now repeats, added the report, as the corporation turns attention to improving VoD player BBC iPlayer and audio platform BBC Sounds.
“In the early years of its current savings programme, the BBC successfully protected audience-facing services, but it has found this increasingly challenging to maintain,” said the report. “The BBC has reduced spending on its content while its audience numbers have fallen and it is not yet clear what the longer-term impact of this will be.”
Meg Hillier, who chairs the UK’s influential Public Accounts Committee, said the BBC “must be wary of the risk that reducing content may lead to yet more people jumping ship and choosing not to pay the licence fee.”
The decline in content spend has partly been made up by international co-production investment from the likes of Netflix and Amazon almost doubling to £385M ($512M) over the same period but this could only worsen concerns that the BBC is losing its distinctive “Britishness” and “poses a risk to the long-term value for money that it can realise from its intellectual property,” according to the report.
The BBC is also trying to make more money from commercial outfit BBC Studios but has acknowledged this will make a relatively small contribution to its future savings.
The level of savings required is only likely to increase, with the BBC recently forecasting “significant” cuts to come.
While programming costs are still rising due to the impact of the streamers, a similar savings programme will likely be needed over the next five years and could be even costlier if the BBC walks away from current government negotiations with a poor licence fee settlement.
These ongoing negotiations will set the price of the £159 ($212) annual fee from 2022 to 2027 and it appears the BBC may not get its preference for the fee rising with inflation, especially with Covid’s economic disruption causing inflation rates to soar.
A BBC spokesperson said: “We will continue to focus on modernising, improving efficiency and prioritising spending on a range of high-quality content to ensure value for money for all licence fee payers.”
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