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Part Two: Annual Report and Accounts 2008/09

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SHARING IDEAS/ CREATING VALUE/ Part Two: Annual Report and Accounts 2008/09 The BBC Executive’s review and assessment BBC EXECUTIVE’S REVIEW AND ASSESSMENT 2008/09/ 001 002 / / OVERVIEW BBC PURPOSES / FINANciaL perForMANce / THE YeaR EW AT A GLANCE / DIRECTOR-GENERAL ForeWorD / RVI DELiveriNG creative FutureS / PARTNERSHIPS / E OV 020 / PERFORMANce OBJectiveS / teLeviSioN / RADIO / FUTURE MEDIA & TecHNOLogY / JourNALISM / coMMerciaL / 084 / GOVERNANCE Executive boaRD / SUMMarY GoverNANce report / 094 / ResPONSIBILITY OperatioNS / 104 / FINANCIAL stAteMENts OvervieW / RISK ouTLOOK / HigHLigHTS / auDitoRS’ STATEMENT / SUMMarY FINANciaL StatEMENT / IFRS / coNtact US / otHer INForMatiON / OVERVIE W/ 003 / EW RVI E OV 004 / BBC PURPOSES/ 005 / FINANCIAL PERFORMANce/ 006 / THE YEAR AT A GLANCE/ 008 / DIRECTOR-GENERAL FORewoRD/ 012 / DELIVERING CREATIVE FUTURes/ 014 / PARTNERSHIPS/ OVERVIE W/ OvervieW/ purpoSES AND FINANciaL perForMANce/ BBC purpoSES/ THE BBC’S Six pubLic purpoSES – buiLT ON our priNcipLES to ‘INForM, EDucate AND ENtertaiN’ – UNDerpiN ALL THat WE DO, AND HELP US to FocuS ON OFFeriNG everYONE IN THE UK MEMorabLE AND DIStiNctive coNteNT AND ServiceS THat ENricH THeir LiveS. SoME HigHLigHTS FroM THIS Year INCLUDED: 004 CITIZENSHIP COMMUNITY The BBC has a worldwide reputation for its The UK is an incredibly diverse place, and we aim reportage and analysis of the world we live in. Our to reflect this diversity at national, regional and / UK-wide, international, national and local channels local levels. We offer services in English, Scottish EW and services cover a wide range of stories tailored Gaelic and Welsh, and programmes in over 30 RVI for a diverse range of users. This year we led the languages from Bengali to Urdu. For communities E agenda on the banking crisis and recession, united more by an enthusiasm than a geographical OV and the Money Matters advice roadshow to or linguistic heritage, we offer output like Antiques Manchester to explain the impact of the credit Roadshow and Songs of Praise, and websites crunch to individuals there. Others are planned. where people can meet and chat like The Archers’ ‘Mustardland’. Not to mention Radio 5 live for all LEARNING sports fans, and local and nations radio for Saturday The BBC promotes and supports formal and football commentary. informal education for children, teenagers and adults across television, radio and the web. People GlOBAL with a passion to learn – the school student Our global news services provide independent needing online revision help with Bitesize or the and internationally respected news and analysis to young man wanting to brush up on his Francis audiences around the world, covering key stories Bacon so he can impress on a big date – will find like the Mumbai terrorist attacks and the Israel/ engaging, entertaining and challenging content at Gaza conflict. On a lighter note, Radio 2 covered the BBC. Our tie-up with Tate Britain on Francis major music festivals like Glastonbury and the best Bacon last year is, in fact, just one of a range of international artists like Burt Bacharach at Electric creative partnerships that is taking existing content Proms and U2. BBC Worldwide launched a Spanish to new audiences. language CBeebies, taking the best of UK content to new audiences. CREATIVITY The BBC offer includes unique and innovative DIGITAL content that entertains and engages audiences. Digital switchover is now under way in the UK, Live music is key to our music offer – from with the whole UK due to be fully converted by Elbow on Radio 2 to hip hop on BBC 1Xtra. 2012. BBC Online is used by 22 million each week, We commemorated the 250th anniversary of and now listen to our radio services via digital the death of Handel with a week of in-depth platforms ten million. ‘Extending the benefits of programming: highlights included Radio 3’s Messiah digital to all’ means we support the people who from Westminster Abbey. And we marked the are last to adopt new technology, as well as the 250th anniversary of the birth of Robert Burns first. Up to seven million people aged 75 or over, with new recordings of some of his works. We disabled or living in care homes will be offered help will be doing more poetry in the year ahead. to switch to digital TV between now and 2012. FiNANciaL perForMANce/ COMMerciaL coMpaNieS are accouNtabLE to SHareHOLDerS. IN THE SAME WAY WE Have A reSpoNSibiLitY to DELiver vaLue For MONEY to LiceNce Fee paYerS, MANagiNG our INcoME EFFicieNTLY AND our outgoiNGS pruDENTLY, ESpeciaLLY IN AN UNcertaiN ecoNOMic ENviroNMENT. 005 LICENCE FEE COLLECTION BBC WORLDWIDE We want to make it easier for people to pay Despite difficult trading circumstances for the their television licence – online and telephone industry, BBC Worldwide increased its sales to transactions now account for over one third over £1billion for the first time (including its share / of the total, and have helped us keep collection of joint ventures and intra-group sales), however EW and evasion costs at 2007/08 levels. its statutory profit was down – partly due to RVI continuing investment as well as cost write-offs E Licence fee collection/evasion % in relation to the collapse of Woolworths and the OV 06/07 9.2 Competition Commission’s rejection of Kangaroo, 07/08 8.7 its video-on-demand proposal. 08/09 8.7 BBC Worldwide statutory profit before interest and tax £m LICENCE FEE SPEND IN THE NATIONS 06/07 111 AND REGIONS 07/08 118 Spend outside London is down very slightly year- on-year as we deliver efficiencies and implement 08/09 86 plans to make 50% of our network television production outside London by 2016 – up from EffICIENCY SAVINGS just over one third this year. We started our new efficiency programme in April 2008 – and have already saved £237million Licence fee spend in nations/regions £m (£192million net of costs). We have a target to 06/07 884 achieve 3% cumulative savings of £1.9billion, which will be re-invested in better content and services. 07/08 984 08/09 948 Gross efficiency savings £m 2,000 Projected SPEND IN THE CREATIVE ECONOMY 1.9bn530 Once more, we spent over £1billion in the UK’s 1,500 creative economy – commissioning programmes 470 from independents (37% of total eligible hours over the year) and collaborating with other 1,000 creative partners. 390 500 Spend in creative economy £bn 300 06/07 1.1 237 0 07/08 1.1 08/09 09/10 10/11 11/12 12/13 Total 08/09 1.1 OvervieW/ THE YEAR at A GLANce/ THE Year at A GLANce/ BBC ServiceS are DESigNED to coMPLEMENT eacH otHer AND OFFer vieWerS, LISteNerS AND USerS CHoice, raNge AND varietY. Not ALL ServiceS are For ALL auDieNceS but ALL auDieNce MEMberS SHouLD be abLE to FIND SOMetHING to INForM, EDucate or ENtertaiN THEM WHEN AND WHere AND HOW THEY WANT. 006 NETWORK teLeviSioN/ / EW RVI E OV NETWORK raDio/ Future MEDia/ JourNALISM/ LESS THAN 295 BREAKDOWN OF PROPORTION OF 177 (9%) BBC SPEND/ MONTHLY LICENCE (5%) FEE 2008/09/ £m £ % 588 39p (17%) Television 2,336 Television 8.00 69 EacH UK Radio 588 Radio 2.01 17 2,336 Online 177 Online 0.61 5 HouSEHOLD paYS (69%) LESS THAN 39 peNce Other 295 Other 1.01 9 per DAY FOR ALL Total 3,396 11.63 10 0 BBC SERVICES For more detail see Note 2 in the financial statements. TELeviSioN RADIO Future MEDia 6 9 % 1 7 % 5% Just over two thirds of the licence fee Just over £2 (17%) of the monthly Just 5p in every pound of licence fee is invested in television programmes household licence fee is spent on radio. is invested in BBC Online, home to and services, equal to £8 per month The ten UK-wide networks cost just our extensive news and sport websites, per household. £1.25 in total. and BBC iPlayer. REACH/% COSTS PER USER HOUR/P SPEND BY SERVICE/£M (UK population who use service (How much to deliver service to users) (Total content spend) each week) 007 BBC ONE 77.6 6.8 1,142 BBC TwO 57.4 7.5 451 BBC THREE 18.7 10.6 87 / BBC FOUR 7.8 16.8 55 EW CBBC 5.2 9.5 36 CBEEBIES 8.0 1.8 16 RVI E BBC HD 0.6 7.0 2 OV BBC ALBA* 0.4 29.4 3 BBC RADIO 1 21.3 0.6 33 BBC RADIO 2 26.1 0.5 40 BBC RADIO 3 3.9 6.3 40 BBC RADIO 4 19.1 1.3 86 BBC RADIO 5 LIVE 11.9 2.3 57 BBC RADIO 5 LIVE SPORTS 1.4 2.6 3 EXTRA BBC 1XTRA 1.1 4.5 7 BBC 6 MUSIC 1.2 3.4 7 BBC 7 1.7 2.0 5 BBC ASIAN NETWORK 0.8 6.9 9 (COST PER USER REACHED) BBC ONLINE 43 9.7 112 BBC RED BUTTON** 25 2.7 13 BBC NEWS CHANNEL 8.4 8.1 48 BBC PARLIAMENT 0.3 18.5 3 BBC ENGLISH LOCAL RADIO 18.6 2.9 109 BBC RADIO ScOTLAND 21.6 (includes RnG) 7.1 25 BBC RADIO NAN GÀIDHEAL 18.2 4 BBC RADIO WALES 17.8 5.0 13 BBC RADIO CYMRU 6.4 11.5 12 BBC RADIO 35.6 4.4 15 ULSTER\FOYLE * BBC ALBA is currently only available via Digital Satellite. It is not available to cable or Freeview households. ** The audience measurement metric changed in January 2008; the 2008/09 figure is more robust than historically reported comparators. OVERVIEW/ DIRECTOR-GENERAL ForeWORD/ 008 THIS HAS beeN ONE OF THE buSieST YearS / IN THE BBC’S HIStorY.
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