Recommendation 14

The BBC’s spending on digital product development is far lower than many other media organisations, many of which are digital-only, though direct spending comparisons are problematic. Additionally, the BBC has a range of universal service obligations that other media firms do not, and provides a range of services that its digital-only competitors 15 Q 45 16 Q 29 17 Q 24 18 Qq 29, 30 19 Public Accounts Committee, Oral evidence: DCMS Recall: Broadband, Gambling and Unboxed, HC 1052. Monday 23 January 2023 20 C&AG’s Report, para 2.2 21 Qq 6, 51 22 Q 37; C&AG’s Report, para 2.4 BBC Digital 11 do not, such as local radio and educational programming. Nevertheless, the BBC is seeking to attract the same audiences as other media providers and has significantly lower funding for developing its digital products. The BBC estimates that its technology product development spending is equivalent to 2.8% of its revenue, whereas its competitors typically spend around 8%–11%. In 2021, for example, Netflix spent £1.7 billion on technology and development. The BBC has therefore not been able to develop its product portfolio with the same pace and sophistication as that of rival media organisations.23