The BBC has called for “radical reform” to ensure its survival in its Annual Report and Accounts for 2025/26, urging the government to use its upcoming Charter review to modernise its regulatory framework and funding model.
The public service broadcaster (PSB) did not back any specific funding model for the BBC, saying it remains “open-minded” on the mechanism ultimately selected. But the organisation was clear in its position that the current system is “no longer sustainable” and modernising the model is “essential” to the continued success of the BBC.
“A Charter that simply maintains the status quo will not be enough to deliver any recognisable version of the BBC in the years ahead,” said the report. “It would abandon the BBC to managed decline and deny UK audiences the benefits of public service media at scale. Instead, we urge a forward-looking Charter that supports a universal, sustainable BBC – strengthening the UK’s democracy, creative economy, and society for generations to come. We look forward to working with the Government and others to achieve this shared ambition in the months ahead.”
Looking to third-party platforms
In his introductory comments, Matt Brittin, the former Google exec who took over as Director-General in May, outlined three major challenges currently facing the BBC: declining trust in news organisations, increasing competition across the global media landscape, and financial pressure, which the organisation has responded to through intensive cost-cutting measures announced last month.
Brittin also outlined three priorities that he has been working on in his first few weeks at the PSB: making the “strongest possible case” for the BBC as part of the Charter process, focusing on editorial excellence, and moving the organisation with “increased velocity.”
The report follows Brittin’s appearance in front of the parliamentary culture committee last week, where he told MPs he has been in talks with Channel 4 to discuss the prospect of combining the broadcasters’ streaming services in order to create a “sovereign platform” that can compete with its US rivals.
BBC Chairman Samir Shah also noted the mounting pressure from streaming giants competing for audience attention. “The BBC faces pressures from cash-rich global streaming platforms and intensifying international competition,” said Shah. “To stay relevant, the BBC must embrace this competition for audiences and find new ways of delivering content that speaks to all communities, geographies, opinions and attitudes.”
And experimenting with platforms was a key theme of the report as the BBC seeks to move faster than it has in the past. “Today it also means making sure we get the right stories in the right formats on the right platforms,” said Brittin. “We must be where audiences are, and experiment more bravely: test ideas, learn quickly and back what works.”
The report cited the BBC’s partnership with YouTube announced earlier this year as part of the strategy to “help ensure more BBC content is accessible to audiences wherever they are,” by making content especially for YouTube, and launching a creator skills and training programme to upskill creators and producers. “We want to accelerate our shift to reach more audiences where they are, including on third-party services such as YouTube,” said the report.
Bold choices
While emphasising the strain on the broadcaster, the report also highlighted the BBC’s strength in the UK media landscape. The PSB is used by 81 percent of UK adults on average per week, according to the report, while BBC News remains the most-used news source in the UK. The report also cited a Yonder survey that named the PSB as the most important media provider in the UK, and noted that The Celebrity Traitors was the most-watched TV show in 2025/26.
On the commercial front, the group saw growth in its D2C services, including BritBox and BBC Select, while Bluey was reportedly the highest selling pre-school toy brand in the US. But growth was offset by declines in commissions and ad revenues, resulting in stable revenues of £2.2 billion. At the same time, BBC Studios-owned broadcaster UKTV grew its share of the commercial ad market, according to the report, while views on its free streaming service U (which is now available on the Channel 4 streaming service) were up 15 percent.
But licence fee income, the primary source of BBC funding, was around 25 percent lower (£1.2 billion in real terms) than at the start of the Charter period, making the renewal a “decisive moment” for the PSB. The report pointed to AI, global tech giants and streaming services “whose algorithms increasingly shape what audiences discover” as threats to the British public’s access to trusted, independent information.
The report also urged the government to update the regulatory framework around the organisation in order to remain competitive in this environment. While acknowledging the importance of checks and balances on the broadcaster, the BBC called for a “lighter, more growth-focused framework” that reflects the scale of global competition and the pace of technological change.
“We recognise very clearly the need for deeper efficiency and commercial growth,” said the report. “We are committed to delivering maximum value for money and to expanding commercial returns that can supplement public funding and be reinvested into public service content. However, success now also requires the Government to make bold choices. The Charter Review is an opportunity to secure a universal public service that is fit for the future. The BBC is seeking a new Charter that will support its transformation, delivering an organisation that is more independent, more sustainable and more responsive.”
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