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Annual BBC report says the service is struggling to keep up with Netflix and Amazon

Annual BBC report says the service is struggling to keep up with Netflix and Amazon


To keep up, it needs more money

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In 2016, the British government released a new charter for the BBC, which established new fee rates, governance, and a new focus on its programming content. Today, the broadcaster released its second annual report, outlining its “creative plan” for the year, its budget, and how it’s working to compete against companies such as Amazon and Netflix.

BBC chairman Sir David Clementi is frank in his assessment of the media landscape, saying “the media industry has continued to change at a remarkable pace. Global media giants are being bought and sold in a race for scale.” He notes that alongside these changes, viewing habits across multiple demographics are continuing to change, and he lays out a case for where the BBC fits into this larger picture.

Like all other established media outlets across the world, the BBC is facing considerable competition from newer broadcasters like Sky and Virgin, and streaming services such as Netflix, Spotify, and Apple Music, as viewers opt to cord-cut, take advantage of exclusive offerings, or opt into all-you-can-watch paid service models. Clementi notes that while consumers have plenty of options — which have raised the bar for quality and delivery options — there are downsides for the BBC. Those high-quality dramas and original content have driven up costs, creating what he says is “super-inflation in key areas like drama and comedy production, sports rights, and talent costs,” at a time when investment in the BBC has declined. The result, Clementi says, is an increased “risk of the BBC being squeezed out of an ever more competitive global market.” As the service’s income has fallen, he says, “our ability to fund original British content has diminished.”

To that end, BBC director general Tony Hall says the BBC is going to have to reinvent itself, and that this year, they’ll be working to increase efforts in online video and its iPlayer application, focusing on personalization, UX improvements, and more content. The companion radio application will also receive some upgrades, which will include a “growing range of podcasts.” The report notes that iPlayer will need to be more than just a place for people to catch up on something they missed live: it needs to be a destination for viewers and listeners. This is a familiar move for a number of US broadcasters as well, from CBS to Disney, which are working on not only establishing their own online streaming sites, but producing original content to entice users to plunk down a monthly subscription fee.

Alongside those improvements, the report notes that a continual focus on high-quality content will be key to retaining viewers. To that end, the service is planning a number of new programs and initiatives, including relevant documentaries, high-quality journalism, additional funds for children’s programming, and new dramas across its major television channels, such as the upcoming series The City and the City, the political thriller The Forgiving Earth, King Lear, and others.

But some of the challenges the BBC has faced are self-inflicted: its licensing fees were frozen in 2010, meaning that the broadcaster can’t easily increase its revenue and investment in content. Meanwhile, competitors such as Amazon and Netflix are hugely increasing their original-content budgets. As the BBC has reorganized to cut costs, creating and delivering high-quality content is an increasing challenge. This brings some real concerns for viewers, not just in the UK, but across the world. The BBC is responsible for some enormously popular and influential projects, with shows like The Blue Planet, Doctor Who, The Night Manager, The Office, Sherlock, and Top Gear, which either find massive audiences, or are spun off in foreign markets.

The report concludes with a stark plea: there is only so much that the BBC can achieve with cutting costs, and if it wants to remain competitive in a marketplace dominated by US streaming companies, it will need new revenue to survive.