Forty-Sixth Report - BBC Digital

The BBC has a high-level plan in place for its £500 million of annual savings and reinvestment into digital, but it is unclear whether this will cover its new ambition to transition to an internet-only future in the 2030s. Following … Read more The BBC has a high-level plan in place for its £500 million of annual savings and reinvestment into digital, but it is unclear whether this will cover its new ambition to transition to an internet-only future in the 2030s. Following its January 2022 licence fee settlement with government, the BBC estimated that it would have a funding gap of £285 million a year by 2027–28. It says that has now increased to nearly £400 million due to inflation, in addition to its funding being cut by 30% in real terms over the past 10 years. The BBC has an overarching target for its digital services to be within at least the top three for UK market share. As part of its digital first plan, announced in May 2022, it committed to an additional £50 million for digital product development from 2025. However, the BBC has not fully determined the details of its £500 million digital investment plan and reports that it is refining the detail required through its current budgeting process. Its plan is heavily dependent on it being able to achieve further savings for reinvestment, but it did not say what it will do if these saving targets become unachievable. Recommendation 2: The BBC should write to the Committee, within two months and once its budget is finalised for the financial year, with reassurance that it has developed the necessary detail in support of its digital investment plan. It should set out: • if its £500 million annual investment by 2025 is sufficient to achieve its plans; • how it will achieve all the required savings; and 6 BBC Digital • what will happen to its digital plans if it is unable to achieve its savings target. Show less

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The BBC faces a significant challenge in a very competitive market to recruit and retain staff with the right digital skills. The BBC had a 23% staff turnover rate in its digital product group as of June 2022. Shortages of … Read more The BBC faces a significant challenge in a very competitive market to recruit and retain staff with the right digital skills. The BBC had a 23% staff turnover rate in its digital product group as of June 2022. Shortages of digital skills are an economy-wide challenge that is not unique to the BBC, and we have regularly heard of similar challenges across government itself, for example with our recent inquiry into the defence digital strategy. The BBC reports that these challenges became more complex during 2022 because of the consequences of the COVID-19 pandemic leading to wage increases as well as more staff working remotely, with people in a local area becoming part of a wider, sometimes international, recruitment market. However, the BBC says that attrition rates are now reducing and its ability to recruit and retain staff is improving. The BBC does not pay digital staff as much as many of its rivals. It acknowledges that it has increased the ranges for some of its digital jobs by more than the standard pay rise that it gave to most of its employees last year. While salaries are important, the BBC also seeks to make the most of its inherent attractiveness as an employer giving the opportunity to work on a very wide range of products compared to others and also supporting a public service purpose. Recommendation 3: The BBC should develop a plan for how it will maintain its recent progress in recruiting and retaining specialist digital staff including succession planning specific to the key digital skills that it needs for the future. Show less

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The BBC’s approach to how it will develop personalised services for audiences is not yet well developed. The BBC wants to personalise its products and services such that audiences can access content that is of interest to them, while also … Read more The BBC’s approach to how it will develop personalised services for audiences is not yet well developed. The BBC wants to personalise its products and services such that audiences can access content that is of interest to them, while also fulfilling its public service obligations. The BBC sees this as a new and interesting challenge and says that, unlike its commercial rivals, it aims to strike a careful balance through human curation of content as well as the use of algorithms. It recognises that its public service obligations should be at the heart of its personalisation strategy. The BBC has spoken about personalisation ambitions over the past nine years and worked to personalise individual products such as the iPlayer. But there is as yet no comprehensive personalisation strategy in place to show what this would look like in practice. Recommendation 4: The BBC should move more quickly on the development of a personalisation strategy that serves its public sector purposes while fulfilling its ambitions for a more tailored experience for its audiences. It should write to the Committee on its progress by December 2023. Show less

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The BBC has developed its approach to data security since 2019 but is not yet doing enough to manage the risks arising from increased access to users’ personal data. The BBC needs to collect and hold some audience data to … Read more The BBC has developed its approach to data security since 2019 but is not yet doing enough to manage the risks arising from increased access to users’ personal data. The BBC needs to collect and hold some audience data to help it to compete in the digital space, and crucial to this is sign-in, where audiences register for and use a BBC account to access its digital services. The BBC has a sign-in strategy, with a target for 72% of digital product views to come from signed-in users by 2023. It also has an overall goal of 23.5 million signed-in users by 2023. The BBC tries not to collect or hold more data about audiences than is necessary and reassured us that it has no plans to commercialise the data that it collects. That makes it distinct from BBC Digital 7 other digital providers. The BBC appointed a data protection officer in 2019 and also set up a central data protection team. However, the increased use of personal data exposes the BBC to more potential risks and it has not shown clearly that its active management of those risks is yet sufficiently embedded. The BBC has assured us that there have been no significant data breaches in the current financial year. Recommendation 5: The BBC should review its data collection and storage policies and work out the minimum amount of data that is needed to achieve its goals, what will be sufficient for its personalisation strategy, and how it will keep that data safe. 8 BBC Digital 1 Planning and funding Show less

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On the basis of a report by the Comptroller and Auditor General, we took evidence from the BBC about its plans for digital transformation.1

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In December 2022, the BBC’s Director-General followed up on the May announcement, describing the BBC’s vision for where it should aim to be by the 2030s and setting out plans to move to an internet future with greater urgency.6 He stated that the BBC would be active in future in …

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At our evidence session in January 2023, the Director-General reiterated to us the need for urgency and how, by any forecast of the future, the vast majority of media consumption will be via the internet.8 However, he also told us that, in his December speech, he had been deliberately provocative, …

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BBC Three was taken off air as a traditional linear broadcast channel and was made an internet-only channel in 2016. Six years later that decision was reversed on the grounds of it having reduced the BBC’s impact with younger audiences, particularly those who still watched broadcast TV.11 We raised this, …

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The BBC also acknowledged the four recommendations in the NAO report, one of which was to build on its December 2022 announcement and plan scenarios for how it could move between broadcast and internet services in the future. It said that those recommendations were extremely helpful, appropriately challenging, and that …

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We raised the question of education for people, typically older people, who are not familiar or confident with adopting what may be new technology to them. The BBC stressed its universality obligation to ensure that content is accessible. It also said it was critical that there was focus and prioritisation …

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Good quality access to online services will rely of course on the roll-out of broadband, overseen by the Department for Digital, Culture, Media & Sport. We noted that the BBC’s universal service commitments could not be met with current broadband provision.16 The BBC highlighted that with a perfect broadband service, …

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Following its January 2022 licence fee settlement with government, the BBC estimated that it would have a funding gap of £285 million a year by 2027–28, and that it needs to deliver £500 million of annual savings and reinvestment to achieve its digital- first ambitions. This funding gap was calculated …

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The BBC’s spending on its product development has also declined, from £109 million in 2018–19 to £98 million in 2021–22 (in 2021–22 prices). However, due to the renewed focus on the growth of its digital products, the BBC has budgeted £116 million to spend within its product group in 2022–23 …

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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 …

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In May 2022, the BBC announced a £500 million investment plan, in support of its digital-first ambitions. The BBC plans for this to come from £200 million a year in spending reductions as well as £300 million a year from redistributing money within the organisation and increased commercial income.24

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We asked whether the BBC considered £500 million would be enough for its investment plan. The BBC said that pressure on the £500 million had increased and it would have to “box very clever”.25 It said it had already taken some tough decisions, it would have to focus, and stop …

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On financial plans, the BBC also said it thought it would have to find ways of attracting more capital into its technology investment.28 But it made clear that there is no plan in the UK to add subscription services, as people have already paid the licence fee.29

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We raised a concern about the lack of sufficient detail to support the BBC’s digital investment plan, for example around how savings will be achieved, what happens if savings targets are not met, or whether additional borrowing would be required.30 The BBC said it was helpful to have had those …

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Although the BBC has managed to successfully recruit and retain a number of highly skilled individuals to lead its digital teams, overall it has a shortage of specialist digital staff. In common with other organisations, the BBC has experienced technology staffing shortages and high turnover of staff. This is partly …

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The product group in the BBC—responsible for developing and delivering the BBC’s audience-facing digital products—accounts for 5.7% of the total BBC public service pay bill.35 In its product group the BBC had 23% staff turnover as of June 2022. This high number of vacancies has slowed technical development. The number …

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The BBC told us that last year had been really difficult for attracting people. It cited the particular consequences of the covid pandemic for the technology market, with international organisations starting to offer remote working contracts, giving potential employees, for example in the Salford area, more options, with salaries rising …

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The BBC considered there may be an increasing sense developing of people wanting to ‘reconnect with purpose’ and of that being a material consideration for people when choosing who they wished to work for; implying that the BBC could benefit from that sort of preference.38 The BBC stressed how it …

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Over the past nine years, the BBC has signalled that it sees offering a more personalised experience as important to its future plans and key to this is sign-in, whereby users register for and use a BBC account to access digital services. In September 2021, it produced a sign-in strategy, …

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Through sign-in, the BBC can collect personal information about its users to understand their preferences. When used alongside recommendation algorithms, this should provide a user experience tailored to their individual preferences. The BBC does not believe that it is possible to compete digitally without knowing users’ viewing habits. However, while …

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The BBC told us that it tried to make the sign-up process as simple as possible, while at the same time giving the user control, and was very conscious of accessibility and different digital familiarity levels.45 The BBC described to us how it was vital to help users find what …

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The BBC also told us that it needed to build something different to a commercial algorithm, saying that there are many commercial models that lead you to where you do not want to be. Whereas, the BBC also has its public service values, and wants to educate and entertain. “We …

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To build a more personalised experience for its users, the BBC will need to increase its use of their personal data. The BBC plans to use these data to support commissioning decisions and to make tailored content recommendations, and needs to meet best practice and transparency in data-handling. There is …

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The BBC told us it had no plans to commercialise the data it holds on viewers, assuring us categorically that it had no plans to use or sell UK subscriber data to any other party for commercial purposes. It said that it collected the least amount of personal data that …

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The BBC welcomed the recommendations made by the NAO which included on managing potential data risk and said it was taking action on oversight and policy. It outlined some actions taken in recent years to improve its approach, stressed that these things were key parts of the organisation, and that …

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The BBC told us it has had no data breaches that it has had to report to the Information Commissioner’s Office (ICO) this financial year. It has reported 27 data breaches since April 2020 and told us that the ICO had not taken any enforcement action against the BBC in …

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