BBC director-general Matt Brittin has told MPs that the current £180 TV licence fee is "no longer fit for purpose," arguing that the funding model is holding the broadcaster back in an era of on-demand streaming. Appearing before the Culture, Media and Select Committee on Wednesday, Brittin said the licence fee, which is legally required to watch live television or use BBC iPlayer, no longer reflects modern viewing habits.
Licence Fee Under Scrutiny
The standard TV licence costs £180 annually and has faced increasing criticism as audiences shift to subscription services like Netflix and Disney+. Brittin, who succeeded Tim Davie seven weeks ago, said the BBC is "locked into yesterday's model of consumption" and needs a funding mechanism that matches today's digital landscape. "Consumers are living in today's world - or tomorrow's world today - and so we need to look again at the mechanism for funding the BBC as part of the charter," he told MPs.
Rejecting Advertising and Subscription Models
Brittin rejected replacing the licence fee with commercial advertising, warning it would damage the wider broadcasting sector and have a "devastating impact on the economy." On a subscription model, he described it as "compelling in terms of extending the licence fee scope to reflect the reality of today's audiences" but did not endorse it as a full replacement. The government is considering the BBC's future funding as part of the Charter Review, with a White Paper expected later this year.
Cost-Cutting and Restructuring
The BBC recently announced plans to reduce costs by 10% over three years, including 550 job cuts in news, nations, and television and radio divisions, with around 2,000 roles expected to be lost overall. Brittin defended the cuts, saying his job is to "make sure that we are operating within the envelope we currently have, argue for a better funding solution for the future, and to reshape the BBC for the future."
Independence and Young Audiences
Brittin emphasised the importance of the BBC's independence, stating that "no programme or presenter is bigger than the corporation, particularly a corporation that is funded by the public." He acknowledged that the BBC remains relevant to younger audiences but needs to do more to reach them. "It's held back by that straitjacket of the current licence fee mechanic," he added.
