The BBC is failing to attract young people and could lose out on a generation of viewers if it cannot solve the problem, a report from communications watchdog Ofcom has warned.

Meanwhile the BBC has been ordered to report back to Ofcom by March next year regarding what it will do to improve its reputation among Scottish viewers. 

Audience satisfaction among Scots continues to lag behind that in other parts of the UK, and audiences in Scotland rated the BBC particularly badly – and worse than last year – for ‘authentic portrayal of the region where I live’.

The second annual report on the BBC looks at the challenges the BBC faces in delivering its mission and public purpose. 

The lack of enthusiasm among younger viewers could pose an existential threat to the corporation, Ofcom says, suggesting that if the BBC cannot engage a younger audience it may not be sustainable “in its current form”.

People aged 16-34 now spend one hour and 12 minutes a day with BBC services, less than half the average of two hours 33 minutes for the population as a whole.

Meanwhile despite plans to evolve the BBC iPlayer into a streaming service it remains mainly a catch-up tool, reaching just 26 per cent of 15-24 year olds each week (down from 28 per cent in 2017). 

This compares with  Netflix, which reaches almost two thirds of this age group each week and YouTube 42% . 

If the figures can’t be turned around Ofcom says, the broadcaster’s revenue could be jeopardised, as young people will lack motivation to pay the license fee.

The report says all public service broadcasters are vulnerable in a rapidly changing media landscape, but adds: “If young people don’t consider the BBC as a core part of their viewing, then it may be hard to encourage them to pay the licence fee which will have significant implications for the BBC’s revenue .”

Although it says given the BBC has faced additional financial pressures due to the Government’s decision that it should be responsible for giving Over 75s free TV licences, the report does not comment on the controversy over withdrawing that benefit. Ofcom said the licence fee was outside its remit and subject to the Government’s Charter with the BBC.

The report also criticised a lack of diversity on the BBC and some said the gender pay dispute had damaged its reputation.

Ofcom said the BBC’s editorial complaints process lacks transparency, citing the way it handled the Naga Munchetty case, over comments the daytime TV presenter made about racism. The report said: “We will be addressing the BBC’s lack of transparency in this area as a matter of urgency.”

It also says Scots, along with people in lower socio-economic brackets, disabled people and the over 65s, continue to rate the BBC’s output less favourably than the wider public. Scottish audiences were also unenthusiastic about the way the country is portrayed in programmes, although the number of people content that the BBC provides “an authentic portrayal of people like me” rose from 39% to 42%. 

“We want the BBC to explain specifically what it is doing to improve audience satisfaction amongst these groups. We expect the BBC to look again at how it evaluates audience satisfaction, and to report on any following steps it will be taking to improve audience satisfaction amongst the least satisfied groups that it has identified by the end of March 2020.”

The report was compiled before the dedicated BBC channel for Scotland, BBC Scotland  was introduced in February this year. While viewing figures are broadly in line with expectations it is too early to assess the channel’s impact, the report says. “BBC Scotland will feature more prominently in our next report when we will report on the first full year of it broadcasting.”

Ofcom’s chief executive Sharon White said: “The BBC is still a vital, valued part of British culture. 

“But we’re concerned that a new generation is tuning out of its services. So the BBC must set out bolder plans to connect with younger viewers and listeners.”

A BBC spokesman said: “The BBC has a clear plan in place to meet the needs of younger and diverse audiences, outlined in this year’s annual plan.

“It is focused on BBC iPlayer, BBC Sounds and BBC News Online. All three have grown strongly in the last year. So our plan is clearly working. 

“But we want to do even more for young and diverse audiences, and we will set out our next steps in our upcoming annual plan”.