The National Audit Office (NAO) has highlighted issues with the BBC’s financial model, as it suffers from falling audience levels. The NAO’s report finds the BBC has been “slow to change” and warns the corporation is at financial risk if it doesn’t adapt to changing viewer behaviours.
The report read: “While the BBC remains the most used media brand in the UK, its share of younger audiences has been under pressure.
“Falling audience share poses a financial risk as people are less likely to pay the licence fee if they do not view licensable content.”
The BBC’s licence fee income fell by £310million between 2017-18 and 2019-20, to £3.52billion.
A significant number of younger audiences have switched off from the BBC, with a 450,000 fall in the number of non-over-75 households buying TV licences.
The NAO said this was due to a change in audience viewing habits and more of these households qualifying for a free over-75 licence, as the decision to scrap free TV licences for pensioners only came into effect from August 2020.
The amount of time an adult spends watching the BBC has also dropped significantly.
In 2010 the average was 80 minutes a day, but in 2019 this fell by 30 percent.
BBC radio audience time has also declined among adults, falling by 15 percent between 2013-14 and 2019-20, when national commercial radio stations have maintained or increased their audience time.
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“The BBC should be freed from the control of government and vested interests and move towards a subscriber-owned mutual.
“This would allow the broadcaster to be a commercial success, better leverage its brand internationally and produce programming its member-viewers value.
“A mutual model would also add diversity to the broadcasting world by creating a unique successor to the BBC as a government corporation”.
Gareth Davies, head of the NAO, recommended the BBC made “significant cost savings” and suggested the corporation produces a long-term financial plan.
A BBC spokeswoman said: “As the NAO has set out, we have made significant savings and increased efficiencies while maintaining our spending on content, and continuing to be the UK’s most-used media organisation.
“We have set out plans for urgent reforms focused on providing great value for all audiences and we will set out further detail on this in the coming months.
“The report also stresses the importance of stable funding for the future, which we welcome as we begin negotiations with Government over the licence fee.”
