BBC may ditch Red Button amid further cost cuts

The BBC is exploring a “phased exit” from its Red Button service and making additional cuts to live sports, news and BBC Online to make up a shortfall of licence fee income ahead of plans to extend the fee to the BBC iPlayer service.

The BBC said it could focus its interactive TV offer on connected televisions and iPlayer in the future. The exit from Red Button is being mulled alongside savings and distribution costs and additional cuts to online activities to deliver £16 million (US$24.3 million) in savings as part of the broadcaster’s overall savings plan.

The BBC is also expected to cut £12 million from its TV budget, though drama shows and Saturday night light-entertainment have been ring-fenced. The axe will fall on factual, comedy and entertainment shows, and the BBC said that savings from the loss of competition entertainment show The Voice will be used to develop new, homegrown formats.

The Red Button service provides additional text-based content and video channels around major sports and entertainment events.

The BBC launched digital text in 1999, but the Red Button brand has been used only since 2008. A hybrid broadcast and internet-connected version, known since earlier this year as BBC Red Button+, was launched in 2012.

The Red Button service could be axed as part of a wider round of cuts amounting to £150 million as a result of reduced licence fee income.

In addition to the closure of the Red Button service, the BBC is expected to cut £35 million from its sports rights budget. The pubcaster earlier this year lost rights to the Open golf tournament to Sky, while Discovery Communcations scooped up UK rights to the Olympic Games from 2022.

The BBC said that the latest round could lead to “the loss of some existing rights and events” on top of events that had already been lost to rivals.

In addition to sports, £5 million will be cut from news, including savings from a review of working practices.

A further £50 million will be saved from cutting management and other back-office savings, including the merging of technology and digital divisions, with this overall group of savings set to see 1,000 posts cut. The BBC said a further £20 million could be saved from long-term contracts due to the lower level of current inflation.

The BBC has been losing licence fee income due to the ability of viewers to switch to online-only viewing thanks to the iPlayer.

The broadcaster secured a pledge from the government at the time of its recent licence fee agreement that the loophole would be closed.

The pubcaster is set to announce a further £550 million in savings by 2021-22.

“The BBC has and is doing everything possible to make sure the impact on the public is minimised,” said director-general Tony Hall. “Wherever possible we’re targeting savings by creating a simpler, leaner BBC, but cuts to budgets for programmes and services are unavoidable.

No director general wants to announce reduced spending on services that the public love. This is very tough, but the BBC’s financial position means there is no alternative.”