The BBC has revealed that it will need to cut spending on its content and services by £408 million ($556M) over the next year as it grapples with falling income, hyper-inflation, and fierce competition for audiences.
In a 39-page report, titled BBC Value For Audiences, the British broadcaster said it is on course to deliver £951M of the overall £1 billion savings target it has set itself for March 2022.
But the BBC warned that programming spend will increasingly feel the strain after it has exhausted back-office, non-content-related savings initiatives. In short: Painful content cuts could be coming.
The BBC said the £408M of so-called “scope” cuts it needs to make over the coming 12 months represents a 66% increase on the £246M of scope savings it made in 2016/17.
The BBC did not set out how it intends to achieve this goal, but previous scope cuts have included closing BBC Three as a linear television channel and ending original daytime programming on BBC Two.
The BBC said: “Additional savings through productivity gains are becoming increasingly difficult and scope savings are now the predominant form of savings for the BBC.
“In order for the BBC to deliver its public service commitments, support the creative industries and continue to invest in high-quality, world-class, distinctive content for UK audiences, it will have to do more with less income to spend on programmes and services.”
The BBC’s admission follows UK public spending watchdog, the National Audit Office, warning last month that the corporation has “delayed making what it considered to be the most challenging aspect of its savings” in recent years, including slashing jobs and cutting content.
Elsewhere in the BBC Value For Audiences report, the BBC set out how its income has fallen 30% over the past decade, as — among other things — its license fee has been frozen by the government.
The broadcaster said it has experienced hyper-inflation in the cost of drama and it is having to co-produce more with the U.S. media giants that are also eating away at its audience. Examples of recent co-productions include His Dark Materials, which is made with HBO.
The BBC also said it has reduced its spend on on-screen talent by 31% to £145M since 2010. Furthermore, it has halved its ranks of senior managers to 253, while the senior management paybill has fallen from £73.3M to £44.2M.
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