BBC profits hit by competition from Netf lix

‘Letting the country down’

THE BBC’s commercial activities have flatlined since 2012 in the face of fierce competition from Netflix and Amazon, a report has revealed.

MPs said yesterday that the broadcaster was ‘feeling the heat of the competition’ and ‘letting itself down’.

The National Audit Office’s first investigation into the BBC’s commercial subsidiaries showed that their income has stagnated since 2012.

Online streaming services Netflix and Amazon, meanwhile, have boomed.

The BBC’s commercial subsidiaries were operating in a ‘rapidly changing and increasingly competitive market’, the NAO warned. ‘Audiences are increasingly accessing content digitally, including via fast-growing global subscription video on demand services,’ it said.

Describing income of £1.1billion in each of the five years from 2012-2013 to 2016-2017 as ‘broadly stable’, the report found that only the Worldwide service had made profits throughout. Even Worldwide’s profit after tax had fallen from £126.6million in 2012-2013 to £40.4million in 2016-2017. The NAO said that the plummeting figure was ‘largely due’ to oneoff costs incurred in 2016-2017.

Although the bulk of the BBC’s income – around £3.8billion a year – comes from the licence fee, the commercial divisions generate extra income which is put back into programmes.

Conservative Andrew Bridgen said of the findings: ‘I’ve long been of the opinion that the BBC’s commercial arm is anything but commercial. It has the luxury of being able to resell the BBC back catalogue around the world and only earns a paltry profit for reselling pro- grammes that are already paid for by the licence fee payer.

‘Projecting programmes around the world is also an excellent arm of UK soft power – the BBC commercial arm is not only letting itself down, the licence fee payer down, it’s also letting the country down.’

Another Tory MP, Sir Bill Cash, said the lack of growth in revenue shows the BBC is ‘feeling the heat of competition’.

A BBC spokesman said: ‘Over the past five years, BBC Worldwide alone has generated almost £1billion for programmes and services for UK licence fee payers, ensuring even better value for money. Given the financial challenges facing the BBC, maximising our commercial revenue will continue to be vital.’ ÷At least 250 BBC staff including Victoria Derbyshire, Mariella Frostrup, Dan Snow and Naga Muchetty have written to director-general Lord Hall calling for the corporation to publish details of individual staff salaries and benefits.

It follows the row about equal pay at the BBC.