BBC Director-General, Tim Davie, has outlined how the corporation will cut costs in order to meet the freeze in the licence fee.
Here is his full speech to staff:
Good afternoon everybody.
Today, in our centenary year, I want to set out a vision of how we keep the BBC relevant and offer value to all audiences in an on-demand age.
I will cover three things: the pressing need to build a digital-first BBC; how we spend our money now that we have the certainty of public funding for six years; and how we keep reforming the way we work.
Of course, part of this is making difficult cuts following the licence fee settlement, but it is much more than that. It is about ensuring that public service media and the BBC thrive, despite immense market changes. It’s about how we nurture this precious place and keep building a vibrant, creative BBC, admired worldwide.
What we are laying out today is a £500m plan for the next few years. This is made up of two things: £200m a year of cuts which are necessitated by the two-year licence fee freeze. This represents the majority of our £285m a year challenge by 2027/28. £50m of this £200m is already baked into our current budgets. The rest is delivered by stopping things and running the organisation better where we can. Then there’s a further £300m a year which is about moving money around the organisation and delivering additional commercial income. This means that we are not just cutting money everywhere but making choices where to invest.
You won’t get all the detail today – and we will be consulting on some proposals – but we are setting out a clear direction of travel that we can incorporate into our plans and budgets. We’ll be communicating timings and details within divisions from today and across future weeks and months.
When I took this job I said that we needed to fight for something important: public service content and services, freely available universally, for the good of all. This fight is intensifying, the stakes are high. The truth itself is under threat. Over 70% of countries do not have a free press. Autocratic regimes are growing. I count myself amazingly lucky to have lived in this age but we all watch with concern: democracy in decline; war in Europe and beyond; our own journalists expelled, and suffering unwarranted abuse just for doing their job.
Now there is good news: together, we have delivered very strong results over the last year despite immense challenges and change. Our audience and revenue numbers are solid, we are rebalancing across the UK as never before, and there has been a huge amount of difficult organisational reform. Our core priorities of impartiality, high-quality content, online, and commercial growth remain undimmed. We kept utterly focussed on value to all audiences.
And while the world is creating millions of pieces of content every day, the value of truly outstanding programming such as a BAFTA award-winning drama like Time, the House of Maxwell documentary, a report from the frontline in Ukraine, a Prom or that amazing Strictly final, is as high as ever.
But, despite this, we have much work to do. In the digital age, continuing what we’re doing today isn’t going to be enough. When I took this job I talked about the immense pride I feel in leading this wonderful institution. I feel that more than ever but I know that we will need to reform to stay relevant.
People sometimes say the BBC is too defensive, not open to challenge, doesn’t respond fast enough. Every successful organisation with 100 years of history faces this challenge, so I plead guilty as charged, to a point. But when I meet people across the BBC, I know that we all see a changing media landscape, and a need to listen, to evolve, and fast.
The market challenge is clear. Though broadcast channels will be essential for years to come, we are moving decisively to a largely on-demand world. Today around 85% of the time people spend with the BBC is with linear broadcasts. Too many of our resources are focused on broadcast and not online. And less than 10% of our usage is signed in, so we can’t offer a properly tailored service, unlike all our global competitors. If we do not respond faster to these changes we will cede too much ground to those who are not driven by public service values.
The vision is simple: from today we are going to move decisively to a digital-first BBC. We have a chance to do something that no-one else is doing: build a digital media organisation that makes a significant positive impact, culturally, economically and socially. A global leader driven by the search for truth, impartiality, outstanding creativity, and independence.
What we are setting out today are first steps, reallocating money towards content that works in the on-demand world, making tough choices on traditional distribution, investing more in online services.
For audiences, success is simple: utterly impartial on-demand news and local services; a world-leading iPlayer with top quality British content; a brilliant, compelling Sounds; and a joined-up, personalised, relevant BBC Online.
Now let me give you a flavour of the detail. It’s not the complete plan but these are some of the headlines and the direction of travel.
Firstly, putting digital first when we create our content.
Today, iPlayer reaches less than 50% of BBC viewers on average per week. Our ambition is to grow this to 75%. We’ll do this by re-allocating significant amounts of money every year into video that delivers on iPlayer, across a broad mix of genres.
We will propose to Ofcom to expand boxsets and archive, to have more BBC series available on demand. And we want to ensure that news and current affairs is as important to iPlayer as it is on broadcast, which means new on-demand content and formats to build new audience habits.
In network news, we have already transformed our operation with digital at the heart of new story teams. Next month we will unveil a new look for our flagship news bulletins, with a new studio for the Six and Ten, and new studios for Breakfast and our regional programmes to follow. These studios will bring key parts of our digital news offer to linear audiences and vice versa, sharing content across platforms. Every part of our news output will now be judged not just on linear performance but streamed delivery.
Beyond news we’ll continue to transform our portrayal of different parts of the UK, fully delivering ‘Across The UK’ plans, and spending more in the devolved nations and outside London. Our goal is bigger, even more ambitious shows – keeping a very strong sense of locality but also able to work beyond borders.
When it comes to our local and regional offer, which is utterly critical to the BBC, we’re going to maintain our overall investment in content, and our support for the Local Democracy Reporting Service, despite our funding challenges. But we will reshape our local services to be fit for the digital world – increasing the impact of our journalism online, and putting compelling local storytelling at the heart of iPlayer, Sounds and News, with a multimedia BBC presence in over 40 towns and cities.
In audio, we will accelerate digital growth, moving more of the 34 million people who listen weekly to linear radio stations to become habitual users of BBC Sounds. We want Sounds to remain one of the top two digital audio services in the UK. To make this happen, we are reorganising all our network radio commissioning to work better as speech and music portfolios, bringing broadcast and on-demand content together. We will simplify some schedules and cancel some shows where linear and on-demand performance is not delivering.
To make all this happen, we will have to make some difficult choices. Here are some examples.
We have already brought the editorial leadership of the News Channel in the UK and international World News together, so that live and breaking news happens in a single integrated model across digital, streaming and broadcast. Now we propose to go further and create output around a single TV channel called BBC News. We know there are stories which are key to UK audiences, but less relevant elsewhere, and vice versa – so not everything will be simulcast. However, there will be much more shared output and a fully co-ordinated approach. And we want to break new ground by creating output that can be simulcast on audio and video services.
At a local level, we think a small number of changes to our regional TV output can help strike a better balance between broadcast and freeing up money to invest online. So we are proposing to end our dedicated TV bulletins from Oxford and Cambridge – merging these services with South Today and Look East.
In local radio, we’re going to focus our work where we get most impact – reducing the volume of some of our broadcast programming at times when fewer listeners tune in. We’ll do this carefully – working with our local editors – and we’ll safeguard our commitment to live sport and local news bulletins across the day.
We will also enhance our investigative journalism across England. We’re proposing that the next series of We are England – this autumn – will be the final one. Instead, we will create a new network of journalists to focus on original storytelling rooted in our communities across England – increasing our investment in local current affairs.
When it comes to network TV, we will reduce the volume of hours we commission a year by around 200. We’ll still offer thousands of originated hours and a very broad range, but fewer hours will mean we are not constantly thinning programme budgets.
We will focus our money where we are distinctive and more uniquely BBC. We will make tough choices about titles which may be performing on linear but are not doing enough to drive viewers to on-demand. A number of them will be cancelled this year. Importantly, higher-impact content will attract more investment from third parties to make our money go further.
And while we will continue to play a vital role in classical music in this country, we must be realistic about the resources we use. We will continue to support the classical music sector, invest in Radio 3 and improve our educational impact. However, we will look to reduce licence fee funding in our performing groups – preferably by looking for alternative sources of income where possible.
There are other areas where we can increase commercial returns and drive growth. Over the last year we have successfully moved areas like Children’s production into BBC Studios. We have been brilliantly successful transferring departments such as the Natural History Unit, maintaining public service values but driving growth. These moves allow us to retain the best talent and increase value for licence fee payers. Based on the rapid growth of the global podcast and audio market, we will now review our speech production areas to consider a commercial model that can tap into the global market for podcasts, strengthen our output, and ensure we keep the best people at the BBC.
So we are making choices around what content we make and how we make it. Beyond that we need to make choices about where we distribute our services.
As we move money into digital, we will inevitably have to spend less on linear distribution. But we will do this with great care – our big channels will be popular for the next decade, at least, and they are incredibly powerful.
We do plan to stop scheduling separate content for Radio 4 Long Wave, consulting with partners, including the Maritime and Coastguard Agency, ahead of the closure of the Long Wave platform itself. 5Live on Medium Wave will also close no later than December 2027, in line with a proposed industry-wide exit from the platform.
Over time we expect to consolidate and share more content between services, and expect to stop broadcasting some of our smaller channels on linear. This will include services like BBC Four, CBBC and Radio 4 Extra. But we won’t do this for at least the next three years because for the moment they are still delivering value to millions of viewers and listeners, at low extra cost.
Putting digital first applies just as much to our international news services. The World Service is critical to the BBC, and its growing digital reach means bigger impact with audiences, more brand value for the BBC and the UK, and bigger opportunities for commercial growth. Broadcast services will continue to play a vital role but unfortunately the licence fee settlement means that we cannot offer every service on all the platforms we do today. So we propose to move some of our broadcast radio and television services off linear where digital provides the better future route to audiences. This builds on the model we’re already using in Latin America and parts of Europe. Of course, we will protect broadcast services where that’s likely to remain the best way of reaching people in the long term.
The Government’s commitment to extend its £94m annual funding for the World Service for a further three years is very welcome. But UK licence fee funding for the World Service, which has been around £254m in recent years, is now running at over £290m including World News – a level that is unsustainable following the licence fee settlement.
We will set out plans in the coming weeks for how we will initially reduce licence fee spending on the World Service by around £30m by the start of 2023/24, while protecting the full breadth of languages.
At the same time, our strategic review will identify the right longer-term model for a digital-first World Service and lay out a strong case for more investment from government over the coming years. This case for a strengthened World Service is compelling but we can only expect UK licence fee payers to fund so much.
So we are making changes to content and distribution. Alongside these, we must make sure our digital services like iPlayer or Sport remain world-class.
Around 30m UK adults come to BBC Online on average per week, and 200m globally on digital platforms. We are now up to over 45m UK accounts, with over 25m signed in monthly. But we have much work to do to be a leading-edge player in functionality, user experience and data.
Quite simply, the success of our online services is the success of the BBC over the next five years. Each needs to be in the top two or three in their market in the UK, with our our online services growing globally too.
We’ve already begun investing more in product development, with an extra £10m this year. From 2025 we expect to be investing up to an additional £50m per year, transforming our level of personalisation and our use of real time data, and making our services as easy to use as possible.
We will continue to personalise iPlayer to make it much more relevant to every age group and different parts of the UK.
In News, we will fully roll out and continuously improve the new News app as a signed-in experience. We will grow our live news pages and transform the quality, prominence and impact of local news.
In Sounds, we will continue to improve our on-demand music offer. We will showcase some of the best non-BBC podcasts from British creators and host more of our podcasts on Sounds first, before distributing more widely. We want to deliver local and network news better across Sounds and ensure we are securing distribution in connected cars.
There’s a lot to take in. You’ll be hearing more detail in your divisions over the next few weeks and months.
Finally, as we transform what we do, we must ensure that the way we work is right for a joined-up, digital-first BBC. Make savings where we can, but also make the BBC a better place to work for everyone, living our values, learning from how we worked in the pandemic, continuing to strip away any unnecessary bureaucracy, and reducing how much it costs to run the organisation.
We will not simply deploy flat savings targets across every department but act more deliberately. Focussing resources on frontline areas where we can maximise the value we deliver to those that pay for us.
We are looking at a range of actions, as I know that this is an area where talk is cheap, it’s all about what we do
We have just laid out our ‘Working at the BBC’ plan and you have heard a number of proposals around fair pay, flexible benefits, a review of pension provision and improved support for working lives.
We will continue to limit the number of senior leaders. We will expect all our leaders not only to be brilliant editorially or functionally, but also be outstanding at supporting their teams.
Also, we can simplify the way we work to free up people’s time. For example, areas such as mandatory training, or recruitment approvals will be simplified.
We intend to remove any remaining duplication in the teams that work across the BBC, and stop bespoke activity when it’s not essential. As part of this, we shall continue to standardise the technology we use to be better and more flexible, like shifting from using radio cars and TV inject points to consumer technology like Zoom.
We will keep looking at our property estate to create better spaces but also reduce spend on rent and utilities. For example, we will complete the exit from Media Village in W12, which really reduces costs, and we will move from the old campus in Bristol to a modern, sustainable location with more flexible space.
All this, including possible moves to commercial, mean that we expect the number of people in UK public service to reduce by about 6% in the next few years, representing around 1000 roles. We will consult fully with our trade unions on these proposals. And we will restructure in a joined-up way across the BBC so we can look for opportunities to redeploy people with the right skills and experience where we can.
So that’s the plan in headlines. Putting digital first, making very clear calls on funding, and really improving how we do things.
This is our moment to build a digital-first BBC. Something genuinely new, a Reithian organisation for the digital age, a positive force for the UK and the world. Independent, impartial, constantly innovating and serving all. A fresh, new, global digital media organisation which has never been seen before. Solely driven by the desire to make life and society better for our licence fee payers and customers in every corner of the UK and beyond. They want us to keep the BBC relevant and fight for something that in 2022 is more important than ever. To do that we need to evolve faster and embrace the huge shifts in the market around us.
I believe in a public service BBC for all, properly funded, relevant for everyone, universally available, and growing in the on-demand age. This plan sets us on that journey.
