The National Audit Office says that the BBC will need to develop its ‘digital-first’ plans further and consider whether it has sufficient resources to deliver its vision. The auditor suggests that the BBC does not have a clear plan for a transition to digital delivery, although television has been digital for over a decade.
The BBC announced a new “digital-first” strategy in May 2022. The BBC has less funding available to develop digital products and services than many other major media organisations. Its overall spend in this area has fallen in real terms from £109 million in 2018-19 to £98 million in 2021-22. Netflix spent £1.7 billion on technology and development in 2021.
Despite this, the BBC is performing well against better-funded media organisations, says the report.
However, the National Audit Office found that the BBC’s digital leadership needs to evolve to deliver its strategy more effectively and accelerate its digital growth.
The National Audit Office is the independent public spending organisation, with authority to audit and report on the financial accounts of public bodies and the value for money provided by public funding.
The report says that while the BBC has made progress in rolling out sign-in to its services, it has not yet produced an overall plan for what personalisation means in practice.
The BBC has not fully explored scenarios for any future shift to digital-only broadcasting, suggests the NAO report. It says that uptake of digital services has been gradual to date, with iPlayer accounting for 16% of all viewing of BBC television, while 73% of adults in homes with a television in the United Kingdom still watch through traditional television transmissions.
The reference to digital-only broadcasting is curious since television has been exclusively digital for over a decade. It follows the BBC strategy that identifies the BBC iPlayer, Sounds, News, and Sport apps as ‘priority services’ while BBC Broadcast channels are now viewed as ‘funnels’ for promoting top-priority products and the web site is a secondary service for signposting them.
Interestingly, these ‘products’ all have the potential not only for personalisation but for the introduction of subscriptions.
Use of the BBC iPlayer among 16-34-year-olds is now at around 25%, but this is well behind their use of Netflix, at 55%. Disney+, only available in the United Kingdom since March 2020, is already used by 23% in this age group.
The BBC has announced that it will invest approximately £50 million extra annually on digital product development by 2025, but the NAO says the plan to support this lacks detail and the BBC is yet to finalise the budget for its digital-first strategy.
The audit report also says that the BBC faces difficulties in recruiting and retaining specialist staff, with turnover rate in the product group at 23%.
The NAO recommends that the BBC should develop a realistic, more detailed digital investment plan to support its digital-first ambitions. The BBC should also set out how it plans to develop its personalisation strategy, including how it will manage the increased data risks. The audit found no evidence of how it would manage and mitigate reputational and other potential risks that could arise as it increases its use of such data.
The report recommends, among other measures, that the BBC should identify scenarios for its proposed role of digital-only linear channels in the future, including how it may need to divest itself of more traditional broadcast technologies, setting out a trajectory for how it may need to move increasingly to internet services.
The report, A Digital BBC, is published by the National Audit Office and is available from its web site.