BBC funding gap and declining traditional TV viewing

The BBC is expected to cut 1000 jobs to help plug £150m gap in its licence fee income.

The decline in licence fee income is a direct result of people claiming they do not watch live TV and are therefore exempt from paying a licence fee.  The number of non-payers in increasing faster than was previously predicted.  The price of the licence has also been frozen at £145.50) for seven years.

The BBC says it is trying to achieve savings via simplification and standardisation, such as reducing management layers and merging divisions.

New research from Ofcom highlights the timebomb implications of changing viewing habits for the BBC.  Only half of what 16-24 year olds watch is ‘traditional, scheduled TV’.  Instead, they are turning to streaming services such as Netflix, watching catch-up TV via the BBC’s iPlayer or Channel 4’s on demand service All4.   

When it comes to sources of news, the younger generation are turning to alternative sources, such as Vice Media, Facebook, Google and Twitter.

TV viewing figures in the US (from Nielsen) have a similar story to tell.  Not only are young people watching less TV, the decline appears to be accelerating. Figures for the first quarter of 2015 show that TV viewing for 18-24 year olds fell by 17% year on year.

Although these declines are most dramatic for the young adult market, traditional TV viewing figures are down for all age brackets. (Average amount of live TV per adult per day was down to four hours and 55 minutes from five hours and 11 minutes year on year; the overall time spent watching TV in TV households was 151 hours and 33 minutes per month, down by about 7-and-a-half hours from the year-earlier period.

Meanwhile, according to iModerate (report available here) customers of streaming TV services in the US were asked about their attitudes to streaming vs. traditional TV.  20% felt that Netflix had the potential to replace other TV options, while many more expressed their belief that streaming services had the power to unseat networks.

Sources: BBC News; The Guardian; Marketing Charts; Nielsen.