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The BBC has dropped plans to sell adverts on some of its podcasts in the UK over popular streaming platforms such as Spotify after an industry backlash.
The national broadcaster’s commercial arm, BBC Studios, will not go ahead with selling adverts against popular podcasts such as Desert Island Discs and The Archers, according to people briefed on its annual plan, which is expected next week.
BBC Studios last year set out proposals to sell adverts in a push to make more money to support the corporation away from its traditional licence fee income.
But companies in the commercial radio and podcasting industry hit out at the move, warning that the adverts would cannibalise their revenues, with the publicly funded and biggest British broadcaster posing unfair competition.
The U-turn by the BBC reflects the challenges facing the broadcaster in coming up with new ideas to make money away from the licence fee, from which it derives the majority of its income.
The corporation is preparing for talks with the government over a future funding model ahead of the renewal of its charter, which dictates its purpose and funding model, in 2027.
The previous Conservative government’s decision to freeze the planned rise in the licence fee — which will cost £174.50 a year from April — forced the BBC to slash costs, including cuts to jobs and high-profile shows.
Tim Davie, BBC director-general, has said that the broadcaster has experienced a drop in funding of about one-third in the past decade.
Some politicians and media pundits have called for the BBC to increase commercial revenues, including through advertising and subscription, in a shift away from taxpayer funding.
But commercial rivals warned that they would not want the extra competition in a tough advertising market.
Matt Payton, chief executive of Radiocentre, said the industry body welcomed the broadcaster’s decision, describing it as “right for audiences as well as the many businesses investing in podcasts in the UK”.
“The BBC receives significant funding from the licence fee to produce distinctive audio content and introducing advertising alongside this would be damaging and inappropriate,” he added.
Owen Meredith, chief executive of News Media Association, a trade body, said at the time of BBC Studios’ announcement last year that the plan would “profoundly distort competition, wreaking havoc on commercial players right across the media and advertising sector”.
The decision, which would not affect podcasts broadcast on its BBC Sounds platform, will be featured in the BBC annual plan expected to be published early next week, according to people briefed on its contents.
Corporation insiders said the main aim of the podcast adverts plan had been to boost revenues for suppliers and help augment money from licence fee payers. BBC Studios can already sell advertising against audio and TV content outside the UK.
The BBC said in a statement: “We have listened to feedback and having considered the options carefully, we have decided to rule out placing adverts around BBC licence-fee funded programmes on third party podcast platforms in the UK.”