The BBC Trust has approved the corporation’s plans to scrap the BBC3 TV channel and make it online-only in a move set to save the corporation £30m a year, while disappointing hundreds of stars and producers who fought against the channel’s closure.

In its first major decision since Rona Fairhead was appointed as chair of the trust last September, the regulator recognised the “clear long-term potential” in moving online, but admitted there were clear concerns about the loss of services to the key 16- to 34-year-old demographic as well as the BBC’s ability to try out new ideas and develop new talent.

In a blow to the corporation, the trust rejected another proposal to launch a new BBC1+1 channel in place of BBC3 because of its likely impact on commercial rivals including ITV and Channel 5.

“We want a strong, sustainable BBC which is innovative, distinctive and relevant and has clear boundaries with the commercial market,” said Fairhead. “It is clear that the long-term future of broadcasting is online and the BBC needs to find new and exciting ways to help audiences make that transition, while bearing down on costs overall.”

The closure of the 12-year-old youth-oriented channel will save about £30m a year, according to the BBC, which aims to redirect some of those savings into its drama budget for BBC1. The budget for the new online-only BBC3 will be cut to £30m.

Although it points out that BBC3’s audience is falling, the trust suggested the BBC could run the online version and TV channel in parallel for a yet-to-be decided period of time in order to address concerns about the impact of its closure on young people and those without superfast broadband.

In the trust’s own analysis, the BBC’s reach among 16- to 24-year-olds could fall by 3% to 3.5%. Up to 5% of black audiences and women in lower income households are also likely to be lost.

On average, 11.2 million people watch BBC3 every week, with fewer than 1 million of that total not watching any other TV service.

The trust estimates that up to 80% of the 925,000 audience who use no other BBC TV service could be lost.

“We know young audiences are already moving towards the online future, but we do recognise in the short term some of them will feel the immediate impact of the BBC3 proposals,” Fairhead said. “We are therefore asking the BBC for commitments to ensure it uses the full range of its television services to better serve young people and others who make up BBC3’s audience.”

She added at a media Q&A that the decision had been finely balanced but in the end cost pressures combined with a sense that the future was online weighed against the fact that the public value of the proposals was at best “low to medium”.

“We all know in the future that many more people will watch online ... the BBC needs to adapt to that challenge to learn to make greater content online,” she said. “Online is the way of the future.”

“With the licence fee frozen in 2010 that cost pressure is really starting to bite ... the fact is the BBC does not have endless resources.”

The BBC will be asked to explore use of the spectrum left behind on the network once BBC3 becomes fully online now that the trust has blocked its plans to show catchup programmes on BBC1+1.

Rejecting proposals for a sale of the BBC brand by two leading independent producers, Fairhead said: “What may be left is some spectrum. If the BBC can find ways of finding value out of that we encourage them to do so.”

ITV was one a number of commercial broadcasters that made submissions in opposition to the BBC1+1 channel, while Ofcom’s assessmentr was that it would have had the “greatest adverse market impact of any of the proposals”.

“We had previously stressed that we felt that it would be an inappropriate use of the licence fee to launch a highly competitive, peaktime repeat channel purely to gain audience share against other broadcasters,” said an ITV spokesman. “We will be looking at the detail regarding the Trust’s view on BBC3.”

Asked why a proposal to “purchase” the BBC3 brand by two leading independent producers was not considered in its report, Fairhead said it was up to BBC management to consider all proposals for spectrum use. But she added, “It would be crazy to drop the brand … The BBC brand is not for sale.”

BBC3 had built up a keen and responsive audience, especially for comedy, she said. The public value would be improved, she added, if the BBC met the conditions imposed to put more programming on BBC1 and BBC2 for young people and run the online and TV services in parallel.

Under the current plans, BBC3 programming would change: “There will be less light entertainment and reality television and more distinctive BBC3 content,” said Fairhead.

“Moving BBC3 audience online will have a short term impact ... we recognise that this audience cares very deeply about BBC programmes that the BBC doesn’t want to lose,” Fairhead added. “In the long term we think it will help ability to create a genuine multimedia broadcaster.”

Richard Ayre, a trustee, described the move online as “a liberating opportunity” with new types of programming that is not restricted to 28 minutes.



Conditions the trust has imposed on the closure also include commitments to broadcasting programmes on BBC1 and BBC2 that appeal to a younger audience, including continuing existing BBC3 programmes. Although BBC3 shows such as Snog Marry Avoid have proved controversial, BBC3 has acted as a seed bed for new talent and ideas.

The BBC must also promise to continue taking risks on new talent and ideas “of the sort that BBC3 has been successful in developing”.

Under BBC proposals, the budget for entertainment and features such as reality television shows will be scrapped, while the bulk of the remaining reduced budget of £30m will be spent on drama and serious factual such as Murdered by My Boyfriend. The budget for personality-led entertainment such as Jack Whitehall and his Dad will be halved, while scripted comedy including series like Cuckoo will see a 25% budget cut to about £10m. Factual entertainment programme Don’t Tell the Bride is to move to BBC1 as part of the plans.

A letter sent to Fairhead and the BBC director general, Tony Hall, in June organised by two leading independent television producers and signed by 750 stars, including Whitehall, Olivia Colman, Daniel Radcliffe, Game of Thrones star Lena Headey and Poldark’s Aidan Turner, argued against the plans.

The corporation had intended to replace the BBC3 TV channel with a one-hour time-shifted version of BBC1, a move that concerned commercial rivals, branding it a ratings-driven move.

The BBC Trust has rejected the proposal, saying it has limited public value and cites a range of issues including a lack of distinctiveness, and that almost a quarter of UK households would need to upgrade TV equipment to receive the channel.

Ofcom’s market impact assessment concluded that a BBC1+1 channel would have a negative impact on commercial rivals, “capturing viewing share for the BBC at the expense of commercial channels and reducing the profitability, in particular, of ITV and Channel 5”.

The BBC Trust accepted other parts of the corporation’s plans, including extending the CBBC children’s channel by two hours to 9pm and developing the BBC iPlayer to include more online-only and third-party content. Such a move will allow BBC3’s online only content to be seen more readily on the iPlayer.

The BBC Trust said the extension of CBBC’s hours would “expand choice for younger viewers, can be implemented at minimal cost and represents a good use of the licence fee”.

Some of the £30m BBC3 budget will be redirected towards drama on BBC1, which currently has a budget of about £1bn.

Both moves are dependent on the final closure of the BBC3 television channel. The corporation, which announced its decision to close BBC3 in May 2014 but did not submit the proposals to the trust until December, has until the end of July to respond to the findings. After public consultation the final proposal will be announced in the autumn.

Under its original plans, BBC3 TV would have been switched off this autumn; this has been extended until January 2016, the last year of the current BBC charter.

A BBC spokesperson said: “We welcome the trust’s provisional conclusion, which is the next step in delivering our vision for a new BBC3. With a frozen licence fee and the BBC’s income cut by 26% we have had to make some very difficult choices, however our plans will allow us to innovate with new ideas and new forms of content for younger audiences. We’ll now consider the areas the trust have asked us to address and respond in due course.”