The BBC on Thursday said that it was cutting 1,000 jobs to help plug a budget gap of ￡150 million (US$234.2 million) caused by a larger-than-expected decline in the number of households owning TVs, as viewers increasingly choose to watch content free online.
The BBC is financed in part by a license fee system, in which every British household with a TV pays ￡145.50 per year to the BBC. That helps generate about ￡3.7 billion pounds for the corporation. TV owners 75 or older are exempt.
The BBC said viewers were increasingly using their mobile devices or going online to catch up on missed programs, suggesting that the BBC needed to update its business model for the digital age by extending the license fee to include digital services.
Photo: Reuters
BBC director-general Tony Hall was quoted by the BBC News Web site as saying that more than 1 million fewer people had a TV than had been forecast by the corporation in 2011, creating the shortfall.
He said the organization faced a “difficult choice,” because of the challenging economic environment, the BBC reported.
“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,” he said in a statement.
The reduction, which amounts to more than 5 percent of the BBC’s workforce, comes as media companies across the globe, including the New York Times Co, are grappling with how to increase revenue and compel viewers or readers to pay for content.
At the BBC, Hall said the cost-cutting drive would include the elimination of senior management roles and the streamlining of staff in marketing, communication and human resources. The cuts should generate savings of ￡50 million, he said.
The BBC has faced several challenges in recent years that have dented public confidence, including criticism over its handling of the allegations of sexual abuse against TV personality Jimmy Savile; attacks by conservative politicians against a perceived left-wing bias; and a debate about the future viability of the license fee system, whose revenue some critics have argued should be shared with other broadcasters.
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