The National Audit Office (NAO) said the streaming giants have better picture and sound quality, recommend content more easily and have more functional subtitles than the BBC.
However, the company leads in picture and sound quality over All 4 and ITV Hub, which has since been renewed as ITVX, according to the NAO’s A Digital BBC report.
Gareth Davies, head of the NAO, said: “(The BBC’s) products perform well compared to other, better funded, media organisations.
“In particular, stronger digital leadership structures will enable the BBC to make the improvements it needs in its approach if it is to sustain this success in a fast-moving, global media market.”
The NAO also said that digital development has been “slower” and “less sophisticated” at the BBC as it has reduced spending on digital products such as BBC iPlayer and BBC Sounds in recent years.
In 2019/20 it spent £109m and in 2021/22 it spent £98m on products. Netflix spent £1.7 billion on technology and development in 2021.
In 2021/22, 25% of 16 to 34-year-olds watched iPlayer compared to Netflix at 55%, the NAO said. The BBC also saw that 81% of young people tuned into its broadcast services on average per week.
The NAO report said that users of BBC News Online had a similar experience to using other news channels. While Spotify was way ahead of BBC Sounds on personalization and ease of use.
The company also has high staff turnover and a lack of employees in its digital department.
“Due to the number of vacancies in the search team, for example, the BBC has not been able to further develop its search function,” the report adds.
“This is partly because the BBC’s salary level is lower than some other potential employers for technology professionals.”
In July, the company announced BBC Four and CBBC will cease to exist as linear TV channels as part of the broadcaster’s plans to become “digital-first”.
BBC World News and the BBC News Channel will merge to create a single 24-hour TV news channel serving both UK and international audiences.
The NAO said the company’s £500m digital plan which includes a further £50m on product development “lacks detail” and needs to be developed.
Dame Meg Hillier, chair of the public accounts committee, said: “The proof will be in the pudding and it has its work cut out.
“To protect itself from being left behind, (the BBC) needs to improve its governance and management of digital services.”
A BBC spokesperson said: “The NAO finds that the BBC’s digital performance is impressive, with more people coming to iPlayer, Sounds and our online services than ever before, but there is more to do.
“We are driving digital reforms across the organization to give people the BBC content they want, the way they want it.
“We have a clear vision for a digital-led BBC which we will continue to deliver on and deliver even greater value for all audiences.”
The BBC said it is investing in improvements to its digital products, with improved navigation, connectivity and design across its platforms, products and services.
It has spent £7m in this area over the past three years, as well as the increased investment the NAO points to, such as the extra £50m a year to transform the use of data, personalization and user experience after 2025.