Trust approves BBC Studios proposals

Date: 20.12.2016     Last updated: 20.12.2016 at 10.59

The BBC Trust has approved plans to turn the production arm BBC Studios into a commercial subsidiary, with a series of recommendations to strengthen its future regulation and governance.

The decision follows 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.

Approval by the Trust means the BBC can now proceed with turning BBC Studios into a commercial subsidiary.

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."

Details on the Trust’s formal decision and consultation can be found here.