BBC suffers a £12.5m loss as it shuts failing online shop

THE BBC squandered £12.5million shutting down its failed BBC Store, it can be revealed.

The download service, which launched in 2015, was supposed to bring in millions by cashing in on viewers’ nostalgia.

But in May, the BBC admitted that the project had failed and told customers it was shutting it down.

Now the BBC’s commercial arm, BBC Worldwide, has revealed that the exercise cost £12.5million – equivalent to 85,034 television licences – wiping out nearly a fifth of its profits.

Its pre-tax profits nearly halved from £100.5million to £54.5millon, while its contribution to the BBC slumped from £222.2million in 2015/16 to £210.5million last year. The BBC itself overspent by £129.1million during the same period.

Billed as an extension to the iPlayer, the BBC Store offered thousands of hours of programmes from the BBC archives. Customers were told that they could download programmes to own forever.

However, it could not compete with the slick streaming services offered by Netflix and Amazon, where customers can binge-

‘Demand was not strong enough’

watch as much as they like for a flat fee as low as £5.99 a month.

By contrast, the BBC Store charged its customers on a per-show basis. The average price was £1.89 for a single episode.

The BBC announced in May that it was giving up on the project just two years after it launched.

It offered its customers refunds and warned them the shows they thought they would own forever would disappear before the end of the year.

BBC Worldwide’s annual accounts said: ‘Levels of demand were not strong enough to underpin a sustainable business over the long term.’

The closure came as a particular blow, given the BBC’s desperate search for new ways to boost its income. Its budget has come under pressure since it was asked to start paying the £700million-a-year bill for free television licences for the over-75s.

The corporation is now looking at new ways to monetise its vast archives.

A message on the store’s website said: ‘The BBC will continue to find new ways of making BBC archive content available.’