The BBC has warned that it faces 'permanent and irreversible' trends that will require a major overhaul of its funding model, as fewer households pay the licence fee despite widespread use of its services. In its opening response to the government's charter review, the corporation revealed that while 94% of UK adults use the BBC each month, fewer than 80% of households contribute to the licence fee.
The broadcaster highlighted a 'mismatch' between current TV licence rules, which are based on watching live television, and modern viewing habits dominated by streaming services and on-demand content. It suggested that the rise of platforms like Netflix and YouTube has led to confusion over when a licence is needed, with many viewers unaware that watching live TV on these services also requires a licence.
The BBC warned that without reform, a 'tipping point' could be reached where those still paying the licence fee resent doing so, fuelling further non-payment. It proposed that the fee could become more progressive, potentially falling for some groups, if the government finds a way to ensure more people contribute. The corporation also suggested that streaming platforms could do more to alert users when they are watching content that requires a TV licence.
In a bid to compete with global streaming giants, the BBC proposed opening up iPlayer to other UK public service broadcasters such as ITV and Channel 4, allowing them to host their content on the platform with support for their own business models, while keeping BBC content advertising-free. It also floated the idea of opening BBC Sounds to third parties and creators.
The BBC's 114-page document acknowledged that the current funding model 'cannot maintain the BBC's public service mission for the future' and called for a 'more sustainable funding model'. The government is expected to publish its own proposals later this year following further talks with the broadcaster.
