Source · Select Committees · Public Accounts Committee
Recommendation 19
19
Accepted in Part
BBC's commercial activities and intellectual property ownership are vital for revenue growth.
Conclusion
The BBC’s commercial activities provide a way to offset declining licence fee income, with BBC Commercial through BBC Studios, reporting turnover growth that it attributes to its ability to generate and monetise intellectual property.43 The BBC told us that commercial revenue had doubled since the start of the Charter period to around £2.2 billion, underlining why the BBC viewed IP as central to sustaining longterm returns. The BBC said that owning IP materially improved margins compared with producing for others, and therefore increasing the proportion of BBCowned programming was important for durable revenue streams.44
Government Response Summary
The BBC will ensure that BBC Commercial’s overall returns including dividends to the BBC Group are published annually in its Annual Report and Accounts, while reporting what is required under accounting regulations.
Government Response
Accepted in Part
HM Government
Accepted in Part
3.1 The BBC partially agrees with the Committee’s recommendation. Target implementation date: 2026 aligned with Ofcom and BBC Annual Report and Accounts publication. 3.2 The BBC is committed to report whatever is required under accounting regulations. While the BBC already also provides a substantial amount of information on its commercial activities in its Annual Report and Accounts, it will ensure that BBC Commercial’s overall returns including dividends to the BBC Group are published annually in its Annual Report and Accounts. 3.3 The BBC Group already reports annually to Ofcom who monitor its commercial activities. Annual reporting to Ofcom includes detailed financial performance of BBC Studios and BBC Studioworks, its two core commercial businesses, including revenue, direct and common costs, and therefore both Gross Profit and percentage profit margin (Earnings Before Interest, Taxes, Depreciation, and Amortisation). The BBC Group’s reporting obligations to Ofcom are detailed in the BBC’s Annual Report and Accounts, along with its other general duties in relation to commercial activities.