The BBC’s annual report, released on Tuesday, shows the dire predicament Auntie Beeb is in. Half a million households stopped paying the TV licence fee over the last year, making it increasingly difficult for the BBC to compete in what is a high-cost industry.
Historically, the use of a compulsory levy could be justified due to the problem of spectrum scarcity (radio frequencies being finite and a limited resource) and that television signals were a public good. The television sets themselves were used purely for the purpose of watching the few channels available to viewers at the time.
But technological progress has made these all but evaporate. Spectrum scarcity is not an impediment any longer. There are countless channels and streaming services, while televisions now serve multiple purposes, from streaming content and playing video games to being an important part of a work-from-home setup.
Despite tough words and the licence fee freeze under Boris Johnson’s government, politicians have instinctively endorsed the current funding model, something that is becoming increasingly unpopular and untenable. Soon after the Labour election victory, Keir Starmer was quick to rule out any changes to how the BBC is funded until at least 2027.
This alone will do nothing to improve the financial prospects of the BBC. In real terms, funding fell by 30% in the ten years between 2010 and 2020. Efficiency cuts will likely occur, but it’s crucial to know why the BBC is struggling so much with funding and losing swathes of licence fee payers.
The way people entertain themselves has changed drastically in recent years, especially amongs young people. A recent study by Ofcom found that young people watch a mere 53 minutes per day, about seven times less than over 65s. Under 16s use YouTube and Netflix more than the BBC each week, a trend confirmed in the BBC’s own research.
Competition has resulted in the BBC slowly being edged out of the market. There are currently just under 24m licence fee payers who pay to use the BBC services and watch live television, compared to about 17m Netflix subscribers and 13m Amazon Prime Video subscribers. The migration of subscribers to streaming services such as Netflix and Amazon Prime Video is generally upward, and considering high-quality original content is produced on these platforms, it isn’t hard to figure why the BBC package is losing its appeal.
BBC impartiality – or the lack thereof – has made the problem all the more acute. As explored in the IEA publication, ‘In Focus: The Case for Privatising the BBC’, staff at the BBC often have shared values, because of the narrow and restricted backgrounds of staff. The proportion who have been privately educated is several times the national average, most come from professional backgrounds rather than commerce or business, and a small proportion from working-class households.
This fuels a common set of beliefs and attitudes, a kind of groupthink, that assumes the professional and managerial classes are able to direct social processes, seeing undesirable social phenomena as ‘problems’ that can be solved by state planning.
With many viewers increasingly seeing bias in BBC content, contributing to the £1.35m salary of the BBC’s top earner, Gary Lineker, is seen by many as a rather brutal kick in the teeth. Constantly weighing in with his views of current events, like the Rwanda policy and the war in Gaza, has blurred the line between freedom of expression and complying with the BBC guidelines that justify its taxpayer subsidy.
Finally, there is an inherent feeling of injustice around the levy, especially when non-payment is considered a criminal offence. About 1,000 people per week are casually criminalised, with many unaware or unable to pay for tragic reasons. It has become commonplace to hear stomach-churning examples of prosecuted non-payers, such as a man who missed payments due to being in hospital for 11 weeks or a woman with a brain injury who simply forgot to pay. The targeting of extremely vulnerable people compromises the civic values at the heart of the BBC.
It is clear that increasing numbers of Brits view the BBC negatively and changes will need to be implemented to ensure continued funding. A subscriber model such as Netflix and Amazon would allow the BBC to survive and complete on a level playing field. But with the funding model protected until at least 2027, a transformation, at least at the moment, looks far off.
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