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Can the BBC’s public funding model survive?


From next summer, millions of British pensioners will have to do something they have not done for nearly two decades — pay to watch the national broadcaster, the BBC.

But Ellen Lebethe does not plan to be one of them. “On principle, I won’t pay,” said the 82-year-old from Vauxhall.

The former secondary school teacher, who is now a member of a pensioner activist group in Lambeth, south London, said she will have to consider the potential legal repercussions, but did not seem to fear the BBC dragging her to court. “Let them dare,” she added.

The BBC’s decision in June to stop subsidising free television licences for roughly two-thirds of pensioners — just under 4m people — caused a storm of anger and reignited debate over how the public service broadcaster spends the money it receives from the public purse — £3.7bn last year.

The move has already become an issue at the UK’s upcoming general election with both Conservative prime minister Boris Johnson and opposition Labour leader Jeremy Corbyn vowing to reverse the decision and keep free licence fees for the over-75s.

Ellen Lebethe. For UKnews about TV license and pensions. 1/11/19 Vauxhall.
Ellen Lebethe: ‘On principle, I won’t pay’ © Anna Gordon/FT

Yet, the question of how to fund the licences for the elderly has prompted a much bigger discussion about how the UK’s biggest broadcaster should be paid for and how it should deal with an existential threat posed at the opposite end of the age spectrum.

Young people are turning away from traditional television and radio in favour of increasingly dominant global streaming services, such as Netflix and Spotify.

One senior BBC executive called the flight of younger audiences “very serious”. “There are many things that are changing, but the BBC absolutely has to deal with the challenge of audiences under the age of 30,” the person said.

Mark Thompson, a former BBC director-general who is now chief executive at the New York Times, said in a speech last month that the average viewer of the broadcaster’s flagship BBC1 channel is now 61.

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The drop-off in younger viewers has been so sharp that the UK’s media watchdog Ofcom, which regulates the BBC, this month warned that the broadcaster “may not be sustainable”.

The competition for people’s attention is only likely to increase as Disney and Apple prepare to spend billions of dollars on their own online broadcasting platforms.

Tony Hall, the BBC’s director-general since 2013, has said the corporation will come out relatively unscathed from the looming streaming wars.

“I believe this is a huge opportunity for people like us. In this market, services that are distinctive and different will stand out,” he told a group of television executives in September.

But could the BBC seek to copy the streaming platforms by, for example, eventually charging for its iPlayer service outside the UK?

Culture secretary Nicky Morgan certainly seems to think so, saying last month she would consider scrapping the £154.50 a year licence fee (the price for a colour TV licence) in the future and replacing it with a Netflix-style subscription.

David Attenborough - Planet Earth - BBC
David Attenborough in his ‘Planet Earth’ series © BBC

Media analysts say this would be an unlikely step for the BBC because charging viewers to stream BBC programmes in other countries would undermine the valuable licensing deals it strikes with overseas broadcasters for programmes such as David Attenborough’s Planet Earth and hit dramas like Sherlock.

But even if that obstacle could be overcome, shifting to a subscription based funding model could dramatically transform the BBC’s near-century old public service mission: to inform, educate and entertain.

“Technology now allows turning the licence fee into a subscription service,” said Peter Bazalgette, chairman of ITV. “But there are strong public interest arguments against it.”

“If you turn it into a for-profit subscription service, then that is not a public broadcaster,” adds one BBC executive.

Under the BBC’s funding settlement, which runs until 2021-22, the licence fee rises annually in line with inflation. While the licence fee funding model is secured as part of its Royal Charter, which runs to 2027, negotiations over a new financial settlement with whoever forms the UK’s new government is likely to start in the next 12 to 18 months.

(FILES) In this file photo taken on March 25, 2019 Actors Steve Carell, Reese Witherspoon and Jennifer Aniston speak during an event launching Apple tv+ at Apple headquarters, in Cupertino, California. - The streaming television war is set to enter a new phase as titans Apple and Disney take direct aim at market leader Netflix, vying for consumers abandoning their cable TV bundles for on-demand services. (Photo by NOAH BERGER / AFP) (Photo by NOAH BERGER/AFP via Getty Images)
Actors Steve Carell, Reese Witherspoon and Jennifer Aniston speak during an event launching Apple tv+ in California in March © Noah Berger/AFP

David Cameron’s Conservative government announced the BBC would take on the whole cost of free licences for the over-75s, forecast to reach £745m by 2020-21. Earlier this year, the BBC said it would bear about one-third of the cost, expected to reach £250m by 2020-21 — a smaller sum which the BBC, nevertheless, says could force it to close “major services”.

If Mr Johnson is returned to Downing Street on December 12 then the BBC is likely to come under even more pressure. Last month the prime minister threatened to “put the screws” on the BBC if it refused to fund free licences for all retirees. “The BBC has the funds,” Mr Johnson told parliament.

Mark Thompson, Chief Executive Officer of the New York Times Company, stands for a photograph during an interview at the office in New York, on Wednesday, Aug. 17, 2016. Photographer: Sara Hylton/Financial Times
Former BBC director-general Mark Thompson has revealed that the average viewer of the broadcaster’s flagship BBC1 channel is now 61 © Sara Hylton/TV

Charles Moore, Mr Johnson’s former editor at the Telegraph, argues the government should go further, breaking up the corporation with “certain bits” such as arts and documentary channel BBC 4 “allowed to survive” through voluntary membership modelled on the National Trust of British historic landmarks.

While that may be a step too far, media analyst Claire Enders warned of a bleak period ahead for the national broadcaster: “The Brexit party wants the BBC shut down, and as long as they are a threat to the Tories the BBC won’t get a penny out of the government.”

Mr Thompson, however, believes the government needs to start thinking of the BBC “as part of the solution to multiple problems” such as social cohesion in the UK and the view of Britain abroad.

“Current funding is no longer sufficient for what the BBC has to do,” he said. “What is the voice of the UK in the world? It is not MailOnline,” he said. “It would be madness to destroy the best megaphone you have.”



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