The BBC has warned it will have to make significant cuts to programmes and services due to a squeeze on its funding and growing pressure from streaming rivals.
The public service broadcaster said it expects to make roughly £408m in content cuts in the upcoming financial year in a bid to shore up its finances.
In a report published today, the BBC said it was on track to make £958m in cost savings by the end of March next year — just shy of its previous target of £1bn.
But the corporation warned it was running out of ways to make savings through back-office cuts, and would have to wield the axe on some of its shows.
“In order for the BBC to deliver its public service commitments, support the creative industries and continue to invest in high-quality, world-class, distinctive content for UK audiences, it will have to do more with less income to spend on programmes and services,” the report said.
The BBC has already had to make cutbacks on programming, such as the loss of Formula 1 broadcast rights, the closure of BBC Three as a broadcast channel and the loss of The Great British Bake Off to Channel 4.
It has also announced at least 800 job cuts from its regional and news units.
The BBC also said it would rely more heavily on collaboration with other media companies — such as The Serpent, its co-production with Netflix — as demand for content pushed up production costs.
‘Adapt and reform’
The radical cuts, spearheaded by new director general Tim Davie, come amid continued financial strain on the broadcaster.
The BBC said it has effectively suffered a 30 per cent decline in its income since 2010 due to increased funding obligations, including footing the bill for the over-75s TV licence concession, and a five-year freeze on licence fee income up to 2015.
The broadcaster is also facing uncertainty over the future of the licence fee after 2027, with incoming chair Richard Sharp hinting he was open to a reform of the funding model.
Alternatives to the licence fee include a household levy similar to the one currently used in Germany. The government has also raised the prospect of a subscription model, though the BBC has warned this would not be sustainable.
Further pressure is mounting on the corporation due to declining audience numbers — especially among younger viewers — as streaming rivals such as Netflix and Amazon Prime continue to grow in popularity.
“The financial challenges and competition we face continue to evolve and while we have demonstrated we can deliver, I want us to adapt and reform further to safeguard the outstanding programmes and services that our audiences love for the future,” said BBC boss Davie.