November 29, 2021
In May 2021, Ofcom consulted on its provisional views on the market position and impact of BBC Sounds. This followed the call for evidence that it published in October 2020, in which it sought evidence and information from stakeholders.
Having considered the responses to the call for evidence, the consultation and other information about the sector, Ofcom has now published its conclusions on the market position and impact of BBC Sounds in the UK audio sector.
Ofcom says that the UK audio sector is undergoing rapid change due to the evolution of online services and the growth of global streaming platforms. Commercial radio and the BBC have responded to this by developing their online offerings.
BBC Sounds is the BBC’s audio streaming and download service, which includes live radio, on-demand music, speech content and podcasts. It is available on a range of devices, including smartphones, tablets, smart speakers and car audio systems.
Ofcom says that it considered the ways in which BBC Sounds might have a significant adverse impact on fair and effective competition by crowding out online radio, including through the cross-promotion of BBC Sounds, or by negatively impacting commercial podcast revenues. It has concluded that there are no reasonable grounds to believe BBC Sounds is having a significant adverse impact on fair and effective competition.
There is strong evidence that: (i) commercial radio has been more successful at attracting online listeners than BBC Sounds; (ii) listeners to BBC Sounds tend to use multiple platforms; and (iii) the UK podcast sector has a wide range of non-BBC content, with producers able to generate commercial revenue and advertising revenue having grown significantly in the past year.
Consequently, Ofcom has decided that the threshold is not currently met for proceeding to a competition review of BBC Sounds under the BBC Charter and Agreement.
Nevertheless, Ofcom recognises that the BBC holds a strong position in the UK audio sector. That has been the case for some time, with the BBC’s radio stations and podcasts continuing to attract significant audiences. BBC Sounds has become a part of that strong position. It is therefore important that the BBC carefully considers how further changes in this area may affect competition. Ofcom says that it will continue to monitor such changes.
Ofcom therefore expects transparency and active engagement by the BBC with the sector about its plans and future strategy to enable it to understand how its proposals might affect competition, and to take this into account when developing them. This is likely to mean the BBC providing more information about planned changes to BBC Sounds than commercial operators might disclose regarding their own plans.
Ofcom thinks that there could be scope for further collaboration between the BBC and other audio content providers in relation to BBC Sounds, which may help to support the future of UK radio in the context of the challenges faced by the sector. To access Ofcom’s statement in full, click here.