BBC must learn lessons from ‘past failings’, MPs say
BBC Store closed just two years after it was launched.
The BBC should learn lessons from “past failings” such as its digital download service BBC Store, MPs have said.
BBC Store closed just two years after it was launched, after struggling to compete with the likes of Netflix and Amazon Prime.
Demand for the service, in which viewers could buy shows to keep, was not as strong as hoped and the project lost money before it was axed.
BBC Worldwide previously sold the Lonely Planet travel guide it had purchased, incurring an £80 million loss.
The House Of Commons’ Public Accounts Committee said it “recognises” the needs for the BBC “to take risks to be commercially successful”.
We recognise the need for the BBC to take risks but it must be responsible, not reckless, in doing so Committee chairwoman Meg Hillier
But it added: “It should learn appropriate lessons from past failings, including BBC Store.”
MPs also warned that the BBC’s commercial performance is at risk from US rivals.
The broadcaster generates commercial revenue indirectly through subsidiaries such as BBC Worldwide and BBC Studios, which merged earlier this year.
In 2016–17, the BBC’s total commercial revenue was £1.2 billion, compared to licence fee income of £3.8 billion.
But changing viewing habits pose “significant risks to future performance”, MPs said.
They said that BBC director-general “Lord Hall is clear that quality programmes will ensure commercial survival but this will be severely tested in the next few years”.
MPs also warned that the corporation could lose commercial income if it extends the length of time its TV shows are on iPlayer.
Such a move “may reduce opportunities for the commercial exploitation of these programmes”, they said.
And they also called on the BBC to make “contingency plans” over its increasing number of co-productions with other broadcasters.
“About two-thirds of the BBC’s TV drama is funded by commercial deals,” the report said.
“As a result, the potential impact on the BBC’s commercial activities has grown should partners’ strategic interests diverge from the BBC’s.”
MPs also criticised what they called the BBC’s “failure” to provide its board with the data it needs to ” judge whether the broadly flat level of performance of the commercial activities in recent years is acceptable”.
The BBC’s total revenue from its commercial subsidiaries remained broadly unchanged at around £1.2 billion in each of the five years from 2012–13 to 2016–17.
The report is the committee’s first on the BBC’s commercial activities.
A BBC spokesman said: “When sales for BBC Store were below expectations we took rapid steps to close it and invest in activity which gives a better return to the BBC.
“This year we’ve also brought together BBC Studios and BBC Worldwide into a single company that will act as a powerhouse for producing and exporting British content.
“We’re expecting positive results from all our commercial subsidiaries when they report next week – demonstrating strong commercial performance across the BBC group.”