The tax-funded state broadcaster has suspended its chief technology officer, John Linwood, during an investigation into how an idea that was supposed to cost £81 million ($122 million), but deliver efficiency benefits of £97 million ($147 million) by 2015, has so spectacularly crashed and burned.
BBC director general Tony Hall told BBC staffers by email that an independent review has been set up to find out what went wrong in what he described as waste of "a huge amount of license fee payers' money." All British TV owners must pay a fee of £145 ($219) for owning a receiver, which is the main source of the BBC's funding.
"I have serious concerns about how we managed this project," said Lord Hall. "We will be looking into what has happened and will take appropriate action, disciplinary or otherwise."
[ Learn more about BBC staff changes in response to criticism. Read BBC Shakes Up Online Arm. ]
"Ambitious technology projects like this always carry a risk of failure; [that] does not mean we should not attempt them, but we have a responsibility to keep them under much greater control than we did here," he added.
The BBC says the bill for canning the system is so large because a lot of the software and hardware that's been developed would only have value if the project was completed. Even so, it "cannot continue to sanction any additional spending on this initiative," it said.
The Digital Media Initiative began in 2008 as an attempt to create a common digital production system. It was originally aimed at transforming the way BBC staff developed, used and shared video and audio content.
The vision was for a new production tool that would make BBC recordings accessible to staff via a desktop, from raw footage right through to the final edit, the BBC reported last week. Archive material would have been accessible via the platform, making it a convenient "one-stop shop" for staff making TV and radio programs, instead of widely used commercial alternatives such as Apple's Final Cut Pro or Avid's Pro Tools.
Work was halted in fall 2012, a year after a BBC Trust report said that the project had been badly managed and the technology was already out of date. As Hall's email said, "there are now standard off-the-shelf products that provide the kind of digital production tools that simply didn't exist five years ago."
The BBC Trust told MP Margaret Hodge, chair of the House of Commons Public Accounts Committee and fierce critic of government waste, that the public's investment had generated "little or no assets." The National Audit Office said in 2011 that the project was "not good value for money."
In a February profile, U.K. IT magazine Computing reported CTO Linwood's annual salary was £287,000 ($433,700) before bonuses. Linwood said in that interview that, "technology is part of everything we do at the BBC, and it's one of the biggest levers for driving effectiveness, efficiency and improved quality. So we're spending more on technology now and we'll spend more next year; I want to reduce the overall technology capital base, so [we are] spending less money on just replacing kit, and more on making us more responsive, agile, flexible and mobile."
James Purnell, the BBC's director of strategy and digital, told the British media last week that, "In the future we are going to rely far more on off-the-shelf technology. We've messed up and we apologize to license fee payers for that."