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Report: BBC services don’t ‘crowd out’ competitors

Independent research published by the BBC Trust has found no clear evidence that BBC entertainment programmes, news programmes or online ‘crowd out’ local newspapers or commercial broadcasters.

The analysis, conducted by KPMG for the BBC Trust, looked at the impact of BBC online on local newspapers, and the impact of BBC TV on news and entertainment programmes from commercial broadcasters.

The report was commissioned by the Trust in response to questions asked by the Government in its Green Paper on the BBC’s Charter Review, about the BBC’s wider impact on the market, and whether it crowds out the commercial sector.

In its overview of the KPMG findings, the Trust has highlighted the importance of continued vigilance and regulation in this area, to guard against any future negative market impacts.

Key findings from KPMG’s work include:

  • There was no evidence that the BBC’s increased online presence had been behind the long-term decline in local newspapers’ circulation or revenues, which may be due to limited overlap between the type of local news services provided on the BBC News website and local newspapers. The evidence suggests that the general growth in Internet penetration and usage have had a statistically more significant impact on local newspaper performance than BBC online activity.
  • In entertainment, there was no firm evidence from the data analysed linking patterns of increasing or decreasing consumption of entertainment programmes from commercial broadcasters with the BBC’s activity. By 2014, commercial broadcasters provided fourteen times more entertainment content than the BBC, and viewing hours were 168 per cent higher for commercial entertainment programmes than BBC programmes.
  • There was no firm evidence from the data analysed that BBC news negatively affected commercial news in terms of viewer hours, with consumption of BBC news flat or declining in recent years and commercial broadcast news declining.
  • There was no clear evidence to suggest that the BBC’s activities have damaged the revenues of commercial broadcasters from the data analysed; BBC spend on television has been decreasing since 2004, while commercial TV revenues have significantly increased by 65 per cent in real terms since 1999, largely driven by subscription revenue.

“The BBC operates in a vibrant market, not a vacuum, and this report finds that the current BBC does not freeze out commercial investment simply by existing,” said BBC Trust Chairman Rona Fairhead. “However, the Trust is also clear that, as a public service broadcaster with £3.7 billion of public money, the BBC’s effect on the market must continue to be carefully regulated to ensure a high quality range of media is maintained.”

The Trust has also published a report from KPMG on the role of the BBC in supporting economic growth, which specifically looks at the economic contribution from the BBC’s presence in the north-west of England, largely through its Salford base; the contribution of the BBC’s presence in the online market; and the BBC’s contribution to the music industry economy.

The reports informed the Trust’s formal submission to the Government on Charter Review, published on 8 October, and are also being submitted to the Government.

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