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The BBC has warned that its current funding model is “not sustainable and needs reform” and that it now faces “jeopardy” in a rapidly changing TV landscape.
The broadcaster published a 100-page report in response to the government’s Green Paper, in which it committed to exploring options around reforming the licence fee. The Department of Culture, Media and Sport said in the report in December that it would look into a new funding system “that better accounts for different household situations”.
Responding to the Green Paper, the BBC stated on Thursday that it won’t survive as a broadcaster unless changes are made due to the “permanent and irreversible” trends in UK viewing habits – and would welcome “radical” options.
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The BBC called for urgent change and said it would welcome ‘radical’ options (Getty)
Explaining that licence fee evasion has increased from 5.3 per cent to 12.5 per cent between 2024 and 2025, the BBC stated that the total number of licence fees has fallen by 2.5 million.
“The primary driver for these changes is the rise in SVOD services and video sharing platforms, and the corresponding decline in live TV consumption,” the BBC wrote.
As a result, the BBC is no longer “a service almost every household paid for and used”, but instead one “that almost every household uses but millions do not pay for”.
It added that the BBC is “at risk like never before”, saying that the new Charter is an opportunity for change. “But we have to be clear-eyed about the jeopardy we now face – both for the BBC and for the UK as a whole.”
While the BBC called for change, it warned that the government’s suggestion of a subscription model would lead to “a very different BBC” that would exclude “many households – particularly older people and people on lower-incomes”.
Instead, it called for a reformed model that asks “more households to contribute at a lower cost” to “strengthen fairness and sustainability”.
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The corporation suggested that Netflix could alert viewers to the fact that they need a TV licence to watch live events on the streamer (AP)
The BBC also suggested that platforms like Netflix and YouTube could raise awareness to their viewers about which content required a TV licence, and offered to host the content of ITV, Channel 4 and other public service broadcasters on iPlayer to create a platform that can compete with the streamers.
Those watching any live video content of streaming services – including Netflix and Prime Video, which host live sport – are required to have a TV licence, with it costing £174.50 per year.
The BBC’s charter, which needs renewing every 10 years, expires on 31 December 2027 – an awkward time for the BBC considering its director-general Tim Davie resigned in November.
He stepped down from the role following allegations that the BBC had selectively edited Donald Trump’s speech on the day of the US Capitol attack in a Panorama documentary.
Referring to the recent controversy, the BBC said in its response: “We know that recent issues have impacted public trust in the BBC as an organisation.
“Attitudes about the quality and impartiality of our news, current affairs and wider content offer are a key driver of public trust.”
Rhodri Talfan Davies is set to take over as the BBC’s interim director-general from 3 April.