DotEcon was commissioned by the BBC Research and Development department (R&D) to prepare an independent evaluation of the costs and benefits of R&D’s work over the previous Charter Period (1 Jan 2007 – 31 Dec 2016). This evaluation forms a component of the BBC’s review of its research and development activity and spending undertaken for the Department of Digital Media Culture and Sport following its recent charter renewal negotiation with the Government.
As part of our assessment, we identified all the projects conducted by the BBC R&D department over the last Charter Period. Within this portfolio we used bottom-up microeconomic techniques to estimate the potential benefits of a number of selected case studies. We assessed direct benefits accruing to viewers and listeners, as well as other measures such as time spent with BBC services, cost savings for the BBC and licensing income to the BBC. We also consider broader spill-over benefits to the broadcast and audiovisual sectors.
The findings of these case studies are then used to estimate the overall net benefit of the work of the BBC’s R&D department as a whole, taking account of the likely probabilities of successful outcomes across the project portfolio.
We demonstrate that the R&D department has generated significant value for the BBC, its audiences and the industry. These benefits exceed cost by a large multiple. We conservatively estimate an overall net benefit of between £5 and £9 for every pound spent by the R&D department.