BBC online cuts offer few savings

The BBC is back in the news with more talks of cuts and savings.

The Guardian reports that BBC director general is looking for additional cost savings of 20% – about £400m – over the next six years.

One of the ways Thompson plans to cut costs is by reducing the amount spent on online services by 25%.

This might sound like a drastic saving. But it masks the fact that online is the poor relation when it comes to BBC finances.

According to the BBC Annual Report for 2009/2010 (PDF), the corporation spent £199.3 million on online.

A cut of 25% would free up just under £50m. Given the BBC’s total budget of £3.5 billion, the BBC would be shaving just 1.4% off its budget.

By comparison, television accounts for £2.3 billion, while radio takes up £603 million.

Just a 2% cut in spending on TV services would save approximately the same amount as a 25% cut in online.

TV and radio are far more well established than online, so it is much harder to take on and change deep-rooted practices.