NAO: BBC digital transformation plan at risk from lack of resources

Financial watchdog warns broadcaster that it may lack resources to achieve its desired digital ambitions, with particular worry over best practice in acquiring, storing and securing personal data and potential exposure to reputational risks

In May 2022, the BBC announced a blueprint to build what it called a digital-first public service media organisation and manage the future demands of viewers and listeners, but now a report from the UK’s National Audit Office (NAO) has cast doubt on its ability to achieve its stated aims.

At the heart of the May 2022 digital transformation plan was a commitment to put digital first when creating content and with a vision of moving decisively to a digital-first BBC, said BBC director-general Tim Davie. The aim was to build a digital media organisation that made a significant positive impact culturally, economically and socially, one that would be a global leader driven by “the search for truth, impartiality, outstanding creativity and independence”, said Davie.

Going forward, the BBC said it would be reallocating money towards content that works in the on-demand world, such as the very popular BBC iPlayer, making “tough choices” on traditional distribution, and investing more in online services. The BBC was planning for its digital services to be within at least the top three for market share in the UK in five years’ time.

In its assessment of the BBC’s ambitions and performance to date, the NAO investigated whether the organisation had the capability to deliver value to its users from its strategic technology review. It examined whether the BBC strategy was evidence-based and supported by a practical, achievable delivery plan, and whether the BBC could demonstrate that it had sufficient and appropriate resources to deliver that plan. The report also examined the BBC’s progress in implementing its digital plans so far and considered the challenges it faced.

The NAO said the BBC now had a solid foundation to build on in delivering its digital-first ambitions. Its digital products were seen to be performing well against better-funded media organisations such as Netflix, and that in 2021-22, most of the BBC’s digital products achieved their targets.

However, the report found that the BBC’s digital leadership needed to evolve to deliver its strategy more effectively and accelerate its digital growth, and emphasised that the BBC had less funding available to develop digital products than most other media organisations, many of which were digital-only.

It noted that the BBC’s overall spend in this area had actually fallen from £109m in 2018-19 to £98m in 2021-22 in real terms. By comparison, said the NAO, Netflix had spent £1.7bn on technology and development in 2021. As a result, the BBC’s products had been developed at a slower pace, were less technologically sophisticated, and it had not always been able to take advantage of technological innovations, said the NAO.

Although the BBC recognised that it needed to make continued improvements in this area and was improving the information on its digital activity that was received by its executive committee, the NAO found limited evidence that the committee was providing sufficient challenge in return. The report noted that the BBC had announced that it would invest about £50m extra annually on digital product development by 2025, but said its internal plan to support this lacked detail and the BBC had yet to finalise the budget for its digital-first strategy.

Read more about personalisation

Greater personalisation of services – particularly for the iPlayer – is an important element of the BBC’s future plans, with a target of 72% of digital product views coming from signed-in users by 2023. The NAO recognised that the BBC had made progress in rolling out sign-in to its services, but added that it had not yet produced an overall plan for what personalisation meant in practice.

Moreover, the increased use of personalisation, with a commensurate rise in use of personal data, also exposed the BBC to greater reputational risks if it did not meet best practice in acquiring, storing and securing personal data, and being transparent about its use.

Another issue raised by the NAO centred on recruiting and retaining specialist digital staff. Even though it said the BBC had successfully managed to retain and recruit highly skilled individuals in key digital positions, the NAO calculated that the BBC’s staff turnover rate in the product group was 23% as of June 2022.

The high number of vacancies was slowing technical development and meant that the company could not develop its search function further because its team was not at full strength. Relatively low pay levels were seen as a component part of this.

Going forward, the NAO recommended that, in the light of its 2022 licence fee settlement, the BBC should develop a realistic, more detailed digital investment plan to support its digital-first ambitions. Moreover, it should develop its digital leadership and governance structures to ensure sufficient challenge to the corporation in terms of digital costs, opportunities and the long-term implications of decisions.

The NAO also observed that the BBC should set out how it plans to develop its personalisation strategy, including how it will manage the increased data risks.

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