BBC Studios, the BBC’s TV production arm, has secured approval to launch as a commercial subsidiary and make programmes for other broadcasters and customers.

Following an extensive regulatory assessment and public consultation, the BBC Trust has formally approved the proposals, which are supported by Government and Ofcom.

The BBC says in an increasingly competitive market, it is important that the BBC sustains a strong production arm, as well as supporting a vibrant indie sector to ensure a secure supply of quality content for its audiences and best value for licence fee payers. Enabling BBC Studios to compete in the market and make content for new channels and audiences, outside of Licence Fee funding, will help the production teams to attract and retain the best creative talent and ensure that the BBC continues to be the world’s greatest programme maker.

BBC Studios is set to launch as a wholly-owned subsidiary in April 2017. It will be committed to supporting the BBC’s public service mission and profits will return to the BBC Group. With bases across the nations and regions of the UK, BBC Studios will continue to reflect and represent diverse voices and creative talent.

Tony Hall, BBC Director General, said “We are renowned and celebrated around the world for the quality of our programmes. I am delighted that our plans have been approved. BBC Studios will soon be able to produce bold, British, creative content for other broadcasters and services, as well as the BBC. BBC Studios is vital to the BBC’s future success – I want to ensure we remain the best programme makers in the world through the coming decades.”

Mark Linsey, Director BBC Studios, said: “BBC Studios has so much to offer creatively, both to broadcasters and the incredible range of talent who work with us. We are responsible for many of the UK’s biggest and boldest shows and the breadth of our portfolio, combined with our BBC editorial values and over 50 years heritage, make us very unique. We have a huge amount of ambition and are excited about continuing our bedrock relationship with the BBC while taking our creative ideas to new audiences.”

The BBC Trust’s approval followed a consultation during the autumn on the BBC Executive’s proposals and a regulatory assessment to test whether they meet the criteria for BBC commercial services set under the BBC’s Charter – including their fit with the BBC’s public purposes, commercial efficiency, any risks posed to the BBC’s reputation and brand, and compliance with fair trading guidelines.

As part of its decision, the Trust has made recommendations for future governance and regulatory oversight both to the new BBC Board and to Ofcom, which takes on regulation of the BBC in April.

The recommendations are based on the principle that BBC Studios will play an important role in supporting the BBC in achieving its public purposes, and should operate in that context with commercial efficiency and without distorting the market.

The recommendations include:

• The BBC Board should put in place effective oversight arrangements for the strategy and commercial performance of BBC Studios, and monitor performance to make sure it supports the BBC’s public service commitments to deliver programmes across a broad range of genres and through production centres across the country.
• The BBC Board should set commercial performance targets on an annual basis. It should regularly assess the commercial efficiency of the business, and its methodology and findings should be published.
• The BBC’s new editorial guidelines should address any potential conflicts between BBC Studios’ operations and the BBC’s overall brand and reputation.
• Ofcom should review the fair trading arrangements between the BBC and BBC Studios in two years’ time to make sure they are operating as intended to prevent market distortion.
• The BBC Board should make sure that new governance arrangements are capable of sustaining the strategic connection between the BBC and BBC Studios, while also maintaining adequate separation between the business and the public service BBC.  These should include effective arrangements for managing conflicts of interest, which should be published before BBC Studios launches as a commercial subsidiary.

BBC Trustee and Chair of the Trust’s Services Committee Suzanna Taverne said: “These are fundamental reforms to the way the BBC commissions and makes programmes. We have put the BBC’s proposals through a rigorous assessment and consultation process, carefully considering the potential risks and benefits to the public, the BBC and the wider broadcasting industry.

“The Trust has concluded that the plans to create BBC Studios, moving the majority of programme making onto a commercial footing, will deliver real benefits both for audiences and for the creative market.

“However, it is vital that both the new BBC Board and Ofcom closely monitor the performance and impact of BBC Studios to make sure it operates as intended,” she concluded.

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