BBC News: Warning over 'disastrous' BBC podcast advert plan

Story from BBC News:

Some of Britain’s biggest media companies have written to the government to warn of their "deep concern" about the BBC's plan to introduce advertising in podcasts for some listeners in the UK.

The letter was sent to Culture Secretary Lucy Frazer by 20 companies including broadcasters ITV and Sky, commercial radio giants Bauer and Global, and podcast producers Goalhanger, co-founded by Gary Lineker.

"The BBC has vast funds to create content for its audiences and is not driven by commercial success, but instead by a mandate to act in the public interest, to inform, educate and entertain," they wrote.

"The impact of it extracting audio advertising funds from the nascent UK podcasting market would be disastrous, especially for the numerous small independent podcast producers."

In March, the BBC announced plans to sell adverts on some of its podcasts for UK listeners on sites such as Apple and Spotify, explaining that "adverts are the norm".

Under the proposals, listeners on BBC Sounds would still hear the same content without ads.

The letter said: "Forcing users to migrate to BBC Sounds if they want to hear content ad-free also has the impact of putting BBC Sounds at a distinct advantage as a platform, having an unfair competitive advantage when it comes to competition between listening platforms."

It added: "These changes are highly likely to have a significant adverse impact on fair and effective competition in the UK podcast market."

Podcast advertising was worth £76m in 2022, it said, compared with the BBC's income of £5.7bn.

The government is currently reviewing funding models for the BBC amid a debate over the future of the licence fee.

The letter added: "We appreciate that the BBC and government will wish to review different options for funding BBC content in future, beyond the current licence fee period up to 2027.

"However, we do not believe that such significant changes should be introduced incrementally and by stealth."

The signatories called for media regulator Ofcom to conduct a review of the UK audio and podcast market.

A spokesperson for the Department for Culture, Media and Sport said: "The BBC has a responsibility under the Charter to avoid adverse impacts on the wider market. It is up to Ofcom to hold the BBC to account in meeting its obligations.

"In the recent Mid-Term Review, we recommended that the BBC take steps to engage more effectively with competitors and fulfill its obligation to work collaboratively."

In March, the BBC said the plan would "generate more revenue to support the BBC, licence-fee payers our suppliers and rights holders".

The corporation has said its income effectively fell by around 30% between 2010 and 2020, and that it must find annual savings target of £700m by 2028.