Balancing: what does the BBC have to do to pay?
Four years from now, the BBC is expected to see the biggest change in the way it finances its 100-year history. When the Corporation's Royal Charter is updated in 2027, the licensing fee in its current form is likely to be history.
Both the government and the BBC itself agree that the mysterious TV ownership tax < br /> cannot remain unchanged in the digital age. Audiences are shrinking, fewer households are paying license fees, and streaming services are taking a bigger piece of the pie.
However, there is no agreement on how the BBC should be funded in the future, and no meaningful talk about what the national broadcaster should provide.
Nadine Dorries promised to eliminate the license fee when she was Minister of Culture, but incumbent President Lucy Fraser was more subtle, stating only that «a license fee is not the only way» and that the BBC «may need to look at various sources of funding.»
The government is expected to announce a formal funding review for the BBC in the fall, although with a general election next year it is more likely that it won't be until 2025 that any government will take the matter seriously, risking being caught at the last minute. a fiction that will not satisfy anyone.
The BBC Royal Charter is due for renewal in 2027. Photo: James Manning/PA Wire
Colin Brown, chairman of the pressure group The Voice of the Listener and the Viewer, is among those worried that time is running out. “If nothing is done before the general election, there will be three years left before the date of renewal of the Charter, and this is not much time to discuss and decide on changes and enter into force,” he says.
< p>Assuming the BBC does indeed have a future, Brown and others are aiming to put the horse before the cart in agreeing on what the BBC should look like, which in turn will help inform levels and methods of funding rather than just change the money side. and told the BBC to keep doing it.
“We urgently need a debate about what we as a country want the BBC to provide,” he says. “Do we want him to continue to provide all the services he does, or do we want him to be different? It would be wrong to decide on financing before we solve this problem.”
Tony Hall, who is more familiar with the issue than anyone else after a seven-year tenure as BBC CEO, agrees. “We have to get on with funding urgently, but that has to happen after we see what we want from the BBC,” he says. “What is more proportional to people's ability to pay should be looked at more closely.”
The BBC includes 13 TV channels, 65 radio stations and a website and broadcasts news, sports, drama, entertainment, documentaries, films and children's television, as well as funding its own orchestras and choirs. The company has a budget of £5bn, including £3.75bn for licensing fees and £1.25bn for overseas sales and merchandising of its shows.
Should BBC licensing fees be abolished? Poll
Netflix, which charges customers £4.99 a month for the cheapest package (compared to £13.25 for a license), has a budget of £12.4 billion that it spends entirely on pre-recorded entertainment, which allows him budget hits like The Crown as well as competitors like Apple TV+ and Disney+.
As The Telegraph recently reported, older viewers are increasingly ditching broadcast channels for streaming services, with Ofcom reporting a 10 percent drop in viewing among people over 65 between 2021 and 2022. Many of them subscribed to streaming services. for the first time during the pandemic and got hooked. At the same time, younger viewers are twice as likely to watch on-demand services than live TV.
So what should the BBC cut to balance reporting?
“The problem is that as soon as you try to refuse something that the BBC does,” says one former executive, “people who really value this service raise an almighty scandal about it. It's really not that easy to cross something out.»
The corporation's conundrum is that it must find ways to attract younger audiences with no brand loyalty and convince them to pay the license fee, while also satisfying the needs of older viewers who expect traditional BBC programming. Last year, the House of Lords Communications and Digital Committee bravely attempted to test various alternatives to the license fee. There were more problems than solutions, as every promising idea—subscription, advertising, verification of funds—was tried, chewed up, and then spat out as unpleasant. The committee concluded that advertising funding for the BBC would not work as the advertising market is not large enough to support the BBC, ITV, Channel 4 and other commercial broadcasters.
The complete Dad's Army box set is available from BritBox. Photo: McCarthy/Express/Getty Images
The full subscription model has also been dismissed as unworkable because all BBC content must be delivered online to deny access to those who don't pay, which will disproportionately affect older people and rural communities who currently lack broadband access. Also, radio broadcasts cannot be protected by paywall unless they are only available on the Internet. To avoid a significant drop in revenue, the BBC would have had to charge £15 a month and convert almost all current license fee payers into subscribers, which is considered unlikely given that the number of license fee payers fell by 500,000 last year. last year.
Going global and boosting Netflix-style revenue by competing directly with streamers around the world is an attractive option, but the BBC doesn't currently own enough programs to make it viable. The BBC does have an extensive back catalogue, but the experience with iPlayer and BritBox has shown that viewers prefer new content and few bother to look for old episodes of Doctor Who or Dad's Army.
Rather than a full subscription model, the BBC could explore a hybrid model in which essential services including news and radio were included in the basic package and the ratings were available to those who subscribed. The downside is that, as one industry source put it, “only the rich get the good stuff.”
One of the most popular alternatives to the royalty fee among those who testified before the committee was the household fee, which could be collected through the municipal tax system in the same way that the police force is financed, and which could be linked to property values. make the new TV tax fairer.
Germany introduced a similar system in 2013 and found it to have the added benefit of lowering fundraising costs by adding it to the existing system, as well as reducing household costs by increasing the tax base. Sweden has replaced the £194 annual license fee with a separate public broadcasting tax on all adult income. However, the new tax will prevent anyone from refusing to pay for a service they may not want or use.
Doctor Who on the BBC is now co-produced by Disney+. Credit: BBC Studios
The Lords' report describes the household fee as a «worthy alternative» to the license fee,
but one industry lobbyist scoffed at the idea, saying: «No government is going to mess with something what could be described as a poll tax, especially in the run-up to
general elections.»
Claire Enders, founder of Enders Analysis, media research. of the company, believes that the most likely reform will be a change in the license fee, combined with greater use of commercial partnerships to reduce production costs.
She says: «I think there will be more connections with streaming broadcasting, like» Dr. Who» is co-produced by Disney+ and I think there will be a change in the license fee that will require richer households to pay more.
«The government could also look at charging businesses more for accessing BBC services: in Germany, all businesses have to pay public broadcasters because they use their websites and programs in the workplace.”
But with the rise of young people doing without BBC TV and the decision not to pay the license fee, simple adjusting the funding model designed in 1923 can only delay major surgery and make it even more painful when it eventually happens.
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