The BBC is facing a funding crisis after Culture Secretary Nadine Dorries announced that licensing fees would be frozen for the next two years – and then potentially cut off entirely from 2027.
Speaking to the Commons last week, Dorries said that a government review into whether a mandatory license fee was still “appropriate” would begin “shortly”.
After two years of freezing, BBC copyright fee will increase with inflation in the next four years. The existence of the fee is “guaranteed” until at least December 31, 2027 under the broadcaster’s Royal charter, which “stipulates its financing and existence”, BBC explain.
Under the current funding model, most of the BBC’s income comes from fees, although “a substantial portion” is generated through its commercial activities, FullFact.
In 2020, BBC income is £4.943 billion, of which £3.5 billion (about 70%) is generated from licensing fees. Of the remainder, more than £1.3 billion came from BBC Studios, a commercial arm that “makes money by selling BBC content to international distributors”, among other business ventures. .
“BBC Studios also owns UKTV channels, including Gold and Dave, through which they earn advertising revenue,” the fact-verification website explains.
But while these other sources of income generate huge amounts of cash, the BBC may need to find other ways to fund its future programme.
Voluntary registration fee
The BBC could take the lead from streaming giant Netflix and transform itself into a voluntary subscription service, with users paying a monthly or yearly fee to watch BBC programming.
However, the subscription fee is likely to be more expensive for users than the current £159 TV license, as “fewer people can opt-in to pay this”, it said. Sky News. And the broadcaster could face huge damages “if a significant proportion of households currently holding a BBC license do not subscribe to the subscription service”.
Another possible issue is that “some services – like the company’s large selection of local television and radio stations – will find it difficult to rank behind what would effectively be a paywall,” the news site said. ie for more.
The days of uninterrupted television could be a thing of the past if the BBC turns to advertising to fill a funding black hole.
Currently, no ads are broadcast on domestic TV channels and BBC websites, although they are on international channels such as BBC World.
But while advertisers could add promotional times such as those on “public service broadcasters ITV and Channel 4”, the move “could cause the BBC to be inclined to consider programs that attract more more viewers and then reduce the variety of the program,” Sky News said.
Former BBC chairman Michael Grade has dismissed the idea, telling BBC Radio Four that a move towards making the adverts would “impoverish ITV, Channel Four, Channel Five, etc”.
“The ad inventory will not expand to meet the needs of the BBC,” he told Today programme.
Australia’s national broadcaster, the Australian Broadcasting Corporation, is funded primarily by an annual government grant.
The introduction of a similar grant to the BBC would “cut off the need to collect a lump sum from each UK household and would instead involve the UK government directly granting the company a certain amount of funding during the year,” Sky News said.
But it will also leave the broadcaster “at the mercy of the government of the day”, says Guardiansmedia editor of Jim Waterson. And “there will also be questions about how to maintain the BBC’s editorial independence if the broadcaster’s funding is decided alongside other spending commitments in the prime minister’s budget”.
Another option is for the BBC to offer broadband rates for all connections in the UK that will be used to fund press and public service communications.
The move would “modernize the current approach whereby royalties are collected from a household’s television set”, Sky News said.
But while it’s relatively easy to enforce, with the proceeds going through broadband providers, it could “increase the price” of broadband for households, the website added.
Despite such concerns, the BBC has told the government in 2020 it will be “open to explore” the option of charging for broadband.
A new tax could be imposed on people’s income to fund public service media in the UK.
Sweden introduced such a tax on all working adults after the abolition of the national license fee in 2019. The Swedish Fees accounts for 1% of taxable income for most earners and is capped at around 1,300 kronor (about £105).
Taxes are paid into a fund dedicated to public service media, which “helps reduce the risk of government interference” and mitigate the problems surrounding it. fair and independent editorialThe Guardian’s Waterson said.
If the UK adopts this model, it means “a new tax appears on payslips alongside income tax and national insurance contributions – something that could be politically challenging”. he added.
Completely abolish the BBC
Under the American approach to public service journalism and media, the government could simply “let the free market take control and allow private companies to shape the nation’s media consumption.” , Waterson said.
https://www.theweek.co.uk/news/uk-news/955517/licence-fee-threat-how-else-could-the-bbc-be-funded BBC Sponsorships: alternatives to license fees