These activities generated revenue of £ 1.2 billion (€ 1.6bn ) in 2016-17 and employed 4,900 staff .

Overall , the BBC ’ s total revenue from its commercial subsidiaries was broadly stable at more than £ 1.1 billion in each of the five years from 2012-13 to 2016-17 . However , among the subsidiaries , only Worldwide made profits throughout the five years . Its profit after tax was £ 40.4 million in 2016-17 , 68 per cent lower than in 2012-13 (£ 127.6 million ), though this was largely due to two one-off costs incurred in 2016-17 .

The BBC ’ s main subsidiaries operate in a rapidly changing and increasingly competitive market . Audiences are increasingly accessing content digitally , including via fast-growing global subscription video on demand services such as Netflix . The BBC ’ s commercial subsidiaries face increased competition and costs to secure the valuable Intellectual Property ( IP ) that underpins the contemporary media business model . In response , Worldwide has entered into more co-productions , partnerships with other international companies , and other projects . These actions could deliver greater

The BBC must notify Ofcom if any commercial line of business is not making a commercial rate of return . financial rewards for the company , and the BBC as a whole , but also entail greater risks . Simultaneous with these developments , advertisers are spending more of their budgets online , putting pressure on the traditional business model for running TV channels , a development that affects both Worldwide and Global News .

A principal focus for Ofcom , the BBC ’ s regulator since 2017 , will be the relationship between the BBC ’ s licence fee-funded PSB divisions and its commercial subsidiaries . The BBC is required to ensure that its commercial activities do not , as a result of their relationship with UK PSB divisions , distort the market or gain an unfair competitive advantage . The BBC must notify Ofcom if any commercial line of business is not making a commercial rate of return . Ofcom can also assess material changes in the BBC ’ s commercial activities . It is currently considering the BBC ’ s plan to merge Worldwide and Studios in April 2018 . The BBC Board has already determined that this development is not material , but Ofcom may reach a different view . The BBC wants to merge Worldwide and Studios to create a more integrated commercial business in order to compete in the increasingly competitive and consolidated global market . The NAO highlights a number of challenges and risks the BBC faces . It is developing new BBC-owned IP , primarily in the form of TV series and formats , to drive growth . It will need to manage risk carefully to ensure that the funds it invests in such projects have the greatest impact possible in a crowded marketplace . The NAO has signalled that the BBC may also wish to consider whether Worldwide ’ s financial returns target , of £ 1.2 billion over five years , remains relevant , given the planned Worldwide and Studios merger and other changes that have occurred .

“ The BBC ’ s expanding commercial activities are undertaken on behalf of licence fee payers and exploit the significant assets that licence fee payers have paid for ,” advised Amyas Morse , head of the National Audit Office . “ The public interest in holding the BBC to account for these activities is therefore clear . Granting the NAO access to the commercial subsidiaries for the first time is an important step in improving the transparency of the BBC ’ s operations . We will continue to scrutinise the BBC ’ s commercial activities to inform Parliament and to help the BBC optimise the value for money it delivers .”