The talks are sensitive because the UK’s national broadcaster is often viewed as a key vehicle for the country’s soft power around the world. But the BBC — which is committed to maintaining impartiality in its editorial output — also frequently faces criticisms of bias from both the left and right of the country’s political spectrum.
Another option is to leave the license fee largely as it is, with a few tweaks, a continuation of uprating, and better enforcement, a person familiar with the internal deliberations said. If there were an obvious alternative model, the license fee would have been scrapped already, they added.
Government discussions remain preliminary and nothing has been decided, the people said. A spokesperson for the DCMS said in a statement that they wouldn’t comment on “speculation,” adding: “we will provide more details about charter review plans in due course.”
The license fee dates back to 1946, when consumers watched programs at the time of broadcast. It currently costs households who watch live TV or use BBC iPlayer £169.50 ($210.60) a year, an amount that usually rises annually with inflation. Even if they don’t watch BBC programs, households are required to hold a TV license to view or stream programs live on sites including YouTube and Amazon Prime Video. However it’s not needed by those who only watch on-demand, non-BBC content.
License fee income in 2023/24 totaled £3.66 billion, little more than the £3.51 billion raised in 2010/11, according to government data. While expanding the fee to cover streaming services would address the shift from linear viewing to video-on-demand, it also risks a backlash from consumers who already pay subscriptions for the same services.
“Forcing streaming service users to cough up the license fee would truly be one of the most bonkers ideas ever concocted,” said John O’Connell, chief executive of the TaxPayers’ Alliance, a pressure group that campaigns for lower taxes. “Far from modernizing the BBC’s funding system, it would only further entrench the already archaic nature of the hated TV tax.”
A YouGov poll commissioned for the Sunday Times found that 36% of voters favor abolishing the license fee and funding the BBC through general taxation, with 49% opposed.
Other options under consideration include: imposing a specific tax on streaming; asking people who listen to BBC radio to also pay the license fee; and making users of the BBC’s on-demand app pay a subscription fee rather than the license, mirroring the business model of services like Netflix, Disney, Amazon Prime and Apple TV. Ministers are also looking at tiering the license fee to ensure lower-income households don’t pay the same rate as more affluent users.
“We want everyone to get value from the BBC,” the BBC said in a statement. “We look forward to engaging with government on the next charter and securing the long term future of the BBC.”