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BBC’s funding system under fire amid viewership changes, Conservatives’ hostility

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People walk near the entrance to BBC Broadcasting House in London.

The BBC's primary revenue source, a compulsory annual fee paid by the British people, is stirring vigorous opposition. Peter Macdiarmid/Getty Images

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In the United Kingdom, you need a license to drive a car, fly a plane, practice medicine and watch TV.

The “TV license” is what Brits call their system for funding their world-famous broadcaster, the BBC. Currently, it costs the equivalent of $216 a year and is compulsory. Anyone in the U.K. caught watching or recording programs broadcast on any television channel or livestreamed on an online platform without a license is likely to be prosecuted.

The BBC — the Beeb, as it’s known — derives around $5 billion a year from this source. That’s 75% of the total revenue it needs to run a vast media empire, comprising 10 national TV channels and 10 national and 40 local radio stations as well as its World Service broadcasts and a global news website.

Full disclosure: The Beeb is a content partner for Marketplace. 

But the license fee is under attack. The government just announced that it’s freezing the fee at the current level for two years and not increasing it in line with inflation — a decision that could cost the corporation nearly $400 million. The government has also hinted that it would like to eventually scrap the license fee altogether.

“It’s time to be asking those really serious questions about the long-term funding model of the BBC and whether a mandatory license fee with criminal penalties for individual households is still appropriate,” Culture Secretary Nadine Dorries declared in the House of Commons. 

This was a statement guaranteed to please many of the government’s right-of-center supporters, who believe that the corporation should not be financed by what amounts to a tax.

It was also guaranteed to anger the opposition Labour Party, which says the Conservatives are pursuing a vendetta against the BBC and that the timing of the announcement was highly significant. It came in the middle of a crisis over allegations that parties held in the prime minister’s official residence during lockdown violated the government’s own rules.

Labour’s spokeswoman on culture, media and sport, Lucy Powell, said the government was trying to distract its supporters’ attention away from the crisis, throwing “red meat” at them by attacking the Beeb.

The license fee is a hot topic.

The corporation’s programs are generally popular. The broadcaster commands the biggest share of the country’s total TV audience — around 32% — and accounts for more than half of all radio-listening hours.  

But its commercial competitors complain that the license fee is an unfair multibillion-dollar subsidy. In the bargain, conservative commentators, like Calvin Robinson, say the Beeb is biased. 

“It’s got a general bias and groupthink mentality that I would term ‘metropolitan liberal elite.’ But other people might just say ‘woke,'” Robinson said.

Growing distaste with the license fee

Allegations of BBC bias reached a peak around the Brexit referendum and its aftermath. 

Rebecca Ryan of the organization Defund the BBC, which campaigns against the license fee, told Marketplace that she became involved with the group because of her disgust at how she feels the BBC covered the nation’s decision to separate from the European Union. 

“I voted to leave, and I found the BBC coverage dire,” she said. “They portrayed the people who voted for Brexit as racist and thick. It was hugely negative.”

In a statement, the BBC said, “The BBC continues to report [on] Brexit impartially. We feature a wide range of different perspectives across our news coverage and our journalists report independently without fear or favor. We are acutely aware of the importance of impartiality to our audiences, which is why we have a new 10-point plan to raise standards further.” 

But anti-license fee campaigners, like Calvin Robinson, deeply resent paying the compulsory charge, regardless of whether they watch the BBC. Robinson argued that technology and the digital revolution have rendered the fee obsolete. 

“It might have made sense back in the old days when the BBC was all that existed. But now we have literally hundreds of channels producing real-time content that has nothing to do with the BBC,” he said. 

Around two-thirds of Brits now disapprove of the license fee, according to the latest opinion poll. And that was roughly the same level of discontent that Marketplace found in conducting random street interviews recently in Rochester, a town 30 miles east of central London.

“To be honest with you, I think the license fee should be scrapped,” said James Wrigley. “Over the past three or four Christmases, they’ve just put on the same old stuff.” 

“I’m happy with some of the content the BBC does, but it needs a different funding model. If you want to use it — like Netflix — you should pay to use it,” said James Watkins. 

Rob Davey said the Beeb should carry commercials. “Adverts would be the easiest thing, wouldn’t it?“ he said. 

News as a public service

In defense of its funding model, the BBC said in a statement, “Given the breadth of services we provide, the Licence Fee represents excellent value for money.”

That view is vigorously endorsed by Claire Enders, founder of the London-based media research company Enders Analysis. She said the annual mandatory charge is the best way to fund a great British public service institution that provides “a massively popular source of advertising-free and highly trusted news and information and entertainment.”

Forget about the Beeb carrying commercials, she said. 

“We have a large plethora of commercial media in the U.K., commercial radio and television all supported by advertising. There is just not enough advertising to go around to fund the BBC as well,” she said. 

Enders insisted that the subscription model wouldn’t work for the BBC either. For a subscription service to be universally accessible — a key public service principle — she said the U.K. would need a fast, reliable broadband connection across the entire country. But that’s not going to materialize any time soon.

So, Enders believes the license fee has got to stay. “It’s the least worst manner to deliver the services that Parliament and the public have decided that they want to have.”

On the streets of Rochester, there was also some staunch — although in the minority — support for the license fee.

“I’m happy to pay it,“ said Tom MacMullen. “I think the BBC delivers a brilliant service. It feels very much worth the money for the amount of radio stations and TV stations that are encompassed within it.”

But in spite of a ringing endorsement like that, the license fee is clearly under threat. With only one in 20 young adults watching BBC broadcasts every day, an escalating cost-of-living crisis and an unfriendly government in power, the long-term future of this funding method seems uncertain.

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