Saving BBC3 'would have meant cutting funds for dramas such as Sherlock'

BBC says it had to choose between cutting BBC1's drama budget and keeping youth-oriented channel

The BBC insists the decision to axe a channel for the first time in nearly 80 years of television broadcasting came down to a difficult choice between continuing to fully fund BBC3, or cutting the money available for BBC1 dramas such as Sherlock and Doctor Who.

No channel divides opinion like BBC3. For every Little Britain and Gavin and Stacey there was a Hotter Than My Daughter and F*** Off, I'm a Hairy Woman. But like a certain brand of beer it reached parts of the audience that other BBC TV channels didn't reach, with shows such as Bad Education and Being Human attracting 29% of 16- to 34-year-olds on a weekly basis.

So the BBC was keen to emphasise that the decision was not an easy one. But nor is it likely to be the last such cut, with warnings this week that the future of BBC4 is by no means assured.

The BBC director general, Tony Hall, in his email to staff confirming the decision on Thursday, said the axe had come down on the 11-year-old youth-oriented service for "financial and strategic reasons".

The level of the BBC's funding was in effect cut by 16% four years ago when the licence fee was frozen and the corporation given responsibility for funding the World Service, said Hall. In other words, the coalition government was to blame.

The 2010 licence agreement under the former director general Mark Thompson led to cuts of £700m, so-called Delivering Quality First, which the BBC is only halfway through implementing. Now Hall needs to find an extra £100m to fund new initiatives including an enhanced and more personalised iPlayer, and BBC3 has paid the price.

From the £75m annual programming budget for BBC3, about £30m will continue to fund programming from next autumn, which will appear under the BBC3 brand online while a further £30m will be directed towards BBC1 drama – leaving a saving of about £15m.

The £30m for BBC1 drama is not new money; it merely keeps the budget at existing levels. The BBC's other funding commitments meant there was a choice between BBC3 and cutting the main channel's drama budget, according to a senior source.

The fact that half of the savings will go into shoring up BBC1 drama reflects concern from the BBC Trust that the channel's peaktime drama has not been up to scratch. The trust told Hall and BBC1's then controller, Danny Cohen, last year that it had to up its game and improve the "quality, variety and originality" of its programming.

Those concerns still exist. BBC1 has plenty of big dramas – Call the Midwife, Last Tango in Halifax, Doctor Who and Sherlock – but the trust is understood to still have concerns that the channel should broaden its palette. The BBC also has to find the money to pay for EastEnders' new Albert Square set.

Sherlock aside (which first aired in 2010), BBC1 is arguably lacking breakout hits that got the nation talking in a way that ITV's Broadchurch did last year. The bar has been raised in the era of Netflix and global drama hits; less Midsomer Murders, more House of Cards.

There are other "strategic reasons" too. Putting BBC3 online feeds into Hall's desire to ramp up the iPlayer, which he sees not as a useful spin-off for catching up on programmes a viewer might have missed, but a "gateway" which (younger) viewers and listeners will increasingly use to access all of the BBC's programmes.

Placing BBC3 shows exclusively on the iPlayer could also bolster Hall's hopes of expanding the reach of the licence fee to include people who don't have a TV set but watch online (an estimated 500,000 homes which, if they all paid up, would generate an extra £72m in revenue).

The BBC's commercial rivals will not appreciate the prospect of a BBC1+1 channel which will replace BBC3 and can be expected to boost BBC1's peaktime audiences by around 10% virtually overnight.

An extra hour of the children's channel CBBC – another beneficiary of the BBC3 cut – will be welcomed by parents, although not the ones who are fans of BBC1's The One Show. Never mind, they can always watch it on catch-up later. But the operators of ITV2, E4 and Sky1, aimed at a similar audience to BBC3, won't be shedding many tears.

Cohen, now the BBC's director of television, admitted that "in an ideal world we would not be making this move for a few more years" – preferring to wait until online, non-linear viewing had grown further. "That would be a safer, less risky strategy," he said. "But we don't have the choice to wait and do that due to the investments we need to make."

Hall said a quarter of viewing among 16- to 24-year-olds was on catch-up or screens other than a traditional TV. Many younger viewers will switch to BBC3 online, accompanied by the scale of a BBC marketing campaign not seen since BBC3 and BBC4 launched a decade ago. The question is how many, and how soon.


John Plunkett and Jason Deans

The GuardianTramp

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