The shortfall in revenues has been blamed on more people using iPlayer, mobiles and online catch-up, leading to an unexpected fall in the the number of households owning televisions. Most of the cuts are expected to come from professional and support areas with management costs also being streamlined. Promising a “simpler and leaner” BBC, Hall also laid out a series of steps the organization will be taking to cut costs further, including reducing the number of divisions, bureaucracy from top to bottom and management roles.
“A simpler, leaner, BBC is the right thing to do and it can also help us meet the financial challenges we face,” said Hall in a statement. “We’ve already significantly cut the costs of running the BBC, but in times of very tough choices we need to focus on what really matters — delivering outstanding programs and content for all our audiences.”
The shortfall in income again raises the need for the BBC to modernize its license fee to keep up with the evolution of digital technology and viewing habits. The pubcaster has been under pressure to find alternative ways to fund its operations. Earlier this year, a report from the House of Commons Culture, Media and Sport Select Committee said that the TV license is “becoming harder and harder to justify.” UK households currently pay a compulsory charge of around $250 a year to help fund the BBC. Some have called on a Netflix-style subscription model, allowing households not to pay for the BBC if they did not wish to watch its programs. Hall has consistently defended the need for the license fee to continue while also recognizing the need to adapt to a digital marketplace.
The victory by the Conservative government in the May general elections has also led to increased speculation as to Prime Minister David Cameron’s plans for the BBC. BBC political editor Nick Robinson has revealed that Cameron threatened/joked with reporters while on a campaign bus that he was “going to close them down after the election.” Though believed to have been made in jest, the threat of closure was an ominous harbinger of what lies ahead for the BBC.