Should commercial media worry about the threat to the BBC licence fee?

A review of the fee is set for 2022.

The Pale Horse: latest BBC big-budget show (credit: Ben Blackall)
The Pale Horse: latest BBC big-budget show (credit: Ben Blackall)

Boris Johnson’s government has signalled that it is looking closely at the BBC licence fee, with some radicals – including his top aide, Dominic Cummings – said to be keen on turning the mandatory £154.50 annual charge into a voluntary levy.

"No10 tells BBC licence will be scrapped," The Sunday Times reported on its front page last weekend, quoting unnamed government sources – although senior Tories subsequently moved to distance themselves from that story.

A review of the licence fee in 2022, during the midpoint of the BBC’s current charter, is on the cards, ahead of a full-blown negotiation in 2027, when the charter is due for renewal.

The political case against the licence fee has several strands; some critics believe the BBC is instinctively left-leaning, they say it "crowds out" commercial rivals and they want lack of payment to be decriminalised. 

There is also a growing view that the BBC has been struggling to maintain relevance in the age of Netflix.

Some commercial media organisations – notably Rupert Murdoch’s News UK, which plans to launch Times Radio as a spin-off of The Times to rival BBC Radio 4 and yesterday announced that it had poached BBC deputy political editor John Pienaar for the station – have self-interested reasons to see the BBC’s income curbed.

However, plenty of other players warn how cuts to the licence fee could upset the UK’s delicate, public-service broadcasting media ecosystem and undermine the quality of programming. For example, if the BBC had to battle better-funded US streaming giants for subscription revenue, or what might happen if the BBC started to take a share of the advertising market (still an unlikely outcome, most industry observers think). 

So should commercial media worry about the threat to the BBC licence fee?

Claire Enders

Founder, Enders Analysis

Yes, clearly, there are major questions swirling around the BBC licence fee and the commercial media that are supported by the advertising and subscriptions mooted to replace the licence fee.

Yes, major print media allege that the BBC "crowds out" existing print websites and subscription media.

But no – the upcoming public service enquiry will conclude, again, that there is barely enough advertising and subscription income in the economy to support existing commercial media and that the UK features a unique mixed ecology that causes all other media to invest more and therefore already works overwhelmingly in consumers’ interests.

David Abraham

Founder, Wonderhood Studios; former chief executive, Channel 4

Yes. The UK has a unique mixture of funding models which has underpinned the health of the UK creative economy for many decades without impairing the growth of commercial innovators like Sky, Global and the FANGs. 

A lesser-funded BBC immediately undermines that ecology – especially in terms of creative risk-taking behind the next generation of talent both on and off screen. 

In post-Brexit Britain, it’s also now more important than ever for UK media that appeals to UK audiences to compete in scale terms with the US-owned digital giants and only the BBC has anywhere near the scale to do so. 

In that sense, those who hope to steal market share from the BBC should be careful what they wish for; future shifts in attention are far more likely to advantage the US digital players than, say, UK print media.

Zoe Harris

Chief marketing officer, GoCompare.com

Absolutely yes. The BBC, under pressure, really could rise to the challenge of self-funding, finally delivering the potential for all those new revenue streams in every broadcaster’s (media companies') three-year plan, never fully realised, shoved to a quiet paragraph in the annual report a couple of years in.

Imagine the opportunity for AFP [advertiser-funded programming] and product placement when content is made by in-house teams with global reach… Consider, too, the improvement in contextual opportunities when Aunty has to really deliver content that niche audiences will love enough to seek out and perhaps pay for.

Great news for advertisers, terrible news for commercial media – on balance, probably good news for consumers.