The British Broadcasting Corp.'s future hinges on its ability to engage young audiences that are increasingly deserting traditional TV for streaming services, United Kingdom media regulator Ofcom said.
An inability to win back younger viewers could lead to the public shunning the license fee, which funds the majority of the broadcaster's annual budget, Ofcom warned in its second-annual report on the leading public service broadcaster.
"The BBC is no longer seeing younger audiences coming back to it but instead they are transitioning their viewing to [subscription video on demand services]," Ofcom said, adding that the BBC "risks a lost generation of viewers unless it can reverse this decline."
Though the broadcaster is trying to increase viewing among 16-34 year olds, the reality is that this demographic is increasingly abandoning it. For the first time, the average weekly reach of all BBC TV channels in 2018 fell below 50% among 16-24 year olds, according to Ofcom. For men in this age group, it is even lower at 46%.
On the streaming side, BBC iPlayer reaches 26% of 15-24 year olds, down from 28% in 2017. That puts it behind the U.K.'s top digital video services for younger viewers: YouTube LLC reaches 42% and Netflix Inc. reaches two-thirds of this demographic.
Ofcom also noted that younger users are abandoning BBC's online news service for social media and news aggregation apps, such as Apple Inc.'s Apple News.
"Representing the diversity of the UK is key to creating authentic content that feels relevant and engaging to all audiences," Ofcom said in the report, adding the broadcaster "should publish the steps it is taking to help all audiences – especially younger people – to understand and engage with the world around them."
Responding to the Ofcom report, the BBC pointed to its plan to meet the demands of younger audiences primarily online via iPlayer and through its BBC Sounds music app and BBC Three sister channel, which offers content targeting younger viewers.