Most members of external review commissioned by the BBC suggest that subscriptions rather than the licence fee could fund the broadcaster from 2020, according to newspaper reports. The BBC says the report recommends “an inflationary licence fee increase with greater commercial revenue.” It says: “no subscription model is recommended”. But bold ideas may be required to secure the long-term future of the BBC.
The external review was established by James Purnell, the BBC director of strategy and overseen by his deputy, John Tate who left the BBC in January.
According to The Sunday Times, most of the 12 members of the centenary review panel thought that the BBC could become a subscription service rather than one financed through the licence fee.
The panel apparently agreed that the licence fee should remain in place until at least 2020, with rises in line with inflation.
The key question is how the corporation should be funded in the future. The royal charter that covers the remit and funding of the BBC expires at the end of 2016.
The television licence fee is currently frozen at £145.50 per year for any household in the United Kingdom that watches or records television at the time of broadcast.
The lobbying has already begun, with Tony Hall, the director general of the BBC suggesting that BBC Three will be taken off air to save money, although it seems the sums involved only represent around 0.5% of the £3.6 billion the BBC receives in licence fee income.
The government culture secretary Maria Miller has meanwhile floated the suggestion that non-payment of the television licence fee should be decriminalised as part of the negotiations on the future funding of the BBC.
180,000 people appeared in court last year accused of not paying the television licence, representing one in ten of all criminal prosecutions. Of those, 155,000 were convicted, receiving a criminal record and facing the prospect of imprisonment if fines of £1,000 are not paid, with around 70 going to jail each year.
In its editorial, The Sunday Times argues that the licence fee is an “anachronism”, observing that 60% of British households now pay a service provider for television. The newspaper is ultimately owned by News Corp, a sister company to 21st Century Fox, which has a 39% holding in British Sky Broadcasting. Sky has10.5 million television subscribers and about double the revenues of the BBC.
While the BBC has always opposed the idea funding the public service through subscription, its own research suggests that people would on average be prepared to pay between £15 and £20 a month for the BBC, rather than the current £12.
That is generally used to suggest that the licence fee is a bargain compared to other commercial subscriptions and that the figure could be increased.
While the BBC might hope for an “inflationary” licence fee settlement it might be wishful thinking in the current climate. The greater risk is that the licence fee remains pegged at its current level and continues to decline in real terms.
The BBC is introducing an online store integrated with the BBC iPlayer and will no doubt use this to suggest that it is exploring commercial opportunities. The BBC is due to unveil plans that will make the BBC iPlayer the ‘front door’ to BBC services.
However, the BBC is ending the ‘pilot’ subscription service that it launched internationally, which might have been seen as the thin end of a wedge that could undermine the case for the licence fee.
While the debate on the funding of the BBC is usually framed in terms of the television licence versus advertising or subscription, there is an alternative by which the BBC could receive revenue through general taxation.
That is a model that is favoured by former BBC director general Greg Dyke, who has said it should be adopted at some point in the future.
The main argument against this is that it could comprise the editorial independence of the BBC, which has been regularly tested by successive governments.
It remains to be seen whether either the BBC or the government will be bold enough to embrace any real change in the existing relationship to ensure the long-term future of the organisation.