Commercial wings of the BBC are making a profit and honouring public service commitments but there are concerns for the future of international news, according to a report.
The BBC has three completely-owned commercial businesses run according to strict guidelines from government.
Subsidiaries of the public-service broadcaster have duties to uphold the BBC’s work in the public interest, to be effective commercially, to ensure the broadcaster does not give them a market advantage and to uphold the reputation of the corporation.
A report by Ernst & Young has found the outside commercial arms of the BBC are meeting their mandated targets.
Concerns were raised in the report over the future of Global News, however, which operates BBC World News and BBC.com.
The report said international news competition meant this commercial branch could struggle to generate audiences and profit in future.
BBC chairman Sir David Clementi said: “I am immensely proud of the work undertaken by the BBC’s commercial businesses.
“They are a vital part of the overall BBC, creating even more value for licence fee payers and providing impartial news around the globe.”
#Luther on @BBCOne made by @bbcstudios on New Year's Day 9pm https://t.co/AJhQvy13Nt
— BBC Studios (@bbcstudios) December 17, 2018
BBC Studios, which provides digital, radio and TV content for the BBC and outside clients, boasted a revenue of £1.3 billion.
Studioworks, which provides studio space in Elstree and White City, also made a sizeable profit and recorded £30 million in revenues in 2017-18.
Global News, which services a huge international audience, recorded revenues of around £100 million but the report notes the media landscape could make the future of the business uncertain.
The report states: “The commercial outlook for Global News is finely balanced, given the challenging market in which it operates.”
Despite some challenges, all of the BBC’s wholly-owned subsidiaries met their targets.
Each business had robust plans in place to avoid conflict of interest and creating an unfair market advantage through the BBC.
The businesses were found to have strict guidelines in place to uphold the reputation of the BBC and they were shown to be financially effective.
They were also found to provide services in the public interest.
Sir David said: “I am pleased that this review finds that our commercial subsidiaries are doing what they should.
“They exhibit commercial efficiency in line with their peer groups and the wider market, fit with the BBC’s mission and public purposes, and we have policies and processes in place to ensure they do not distort the market.”
