Should we keep the TV licence?

The TV licence - outdated behemoth or bastion of Britishness?

by Andy Bassett
Movies & TV Article


Should we keep the TV licence?
With the recent announcement that Auntie Beeb is getting into bed with ITV and launching a full-scale, chargeable streaming service under the existing BritBox umbrella, is the venerable corporation edging ever closer to becoming a subscription only service like Netflix? Or will the licence that we’re all so used to paying remain, meaning that consumers who want to access BritBox will simply be expected to pay twice?
Over its near 100 years of existence, the BBC has long been a technical pioneer but it has maintained a resolutely static approach to generating income, an approach to which it is inextricably linked - the TV licence fee. It is a funding approach born out of the early days of the BBC as it became the British government’s sanctioned arbiter of the fledgeling medium we know as television.

Let’s take a look at what the TV licence actually does.

Who Needs a TV Licence?

Who Needs a TV Licence

Should we keep the TV licence?
Even back in the 1920’s, listeners to the BBC’s radio broadcasts required a 10 shilling licence to receive the transmissions and that model has stayed in place ever since, with the TV version being introduced in 1947. Currently, the requirement to pay a fee for a TV Licence is mandated under the Communications Act 2003, and other related legislation, and requires viewers to hold a licence if they:

  • watch or record programmes as they’re being shown on TV or live on an online TV service, including programmes streamed over the internet and satellite programmes from outside the UK
  • watch or download BBC programmes on demand, including catch up TV, on iPlayer
The requirement covers any device including TVs, computers, laptops, tablets, mobile phones, streaming devices such as Chromecast, and games consoles - they all need to be covered by a TV licence if you can watch or download BBC content using iPlayer on it. Usually, all devices are covered by a single household licence.

What Does the Licence Pay For?.

What Does The Licence Fee Pay For?

Every year the public forks over the licence fee and every year the BBC use it to produce good quality comedy and drama, documentaries and impartial news reporting. The BBC also provides coverage of music, sports, social and local events. It’s been this way since 1947 when the TV licence was introduced and everyone is used to it - for the majority of consumers, it’s like paying for any utility. After so long, the BBC and its licence fee feels woven into the fabric of our society to a point where the fee’s absence would seem, odd, at least for viewers of a certain age.

The latest price hike will occur in April 2019 and sees the cost of the most popular licence (that of radio + colour TV) go up to £154.50. This equates to £12.87 per month and is nearly 30% more than a top tier Netflix subscription - although price rises for the streaming giant are expected to hit the UK at some point, after they were announced for US customers recently.
Should we keep the TV licence?
The licence fee pays for numerous live BBC TV channels (including those supporting Wales and Scotland) plus Red Button alternatives, a multitude of radio stations featuring music, sports, the World Service, and the Asian Network plus online services such as BBC III, BBC iPlayer, BBC Kids, Bitesize and information pertaining to music, sport, news and weather, and most people would be probably see this as reasonable value for money.

Although a counter view might argue that there are plenty of free online resources that are equally as good as the BBC’s, one only has to look at the public's response to the proposed closures of 6 Music and the BBC Recipes archive a few years ago to see that people feel very passionately about having the BBC available as a trusted resource and that they are unwilling to see this resource downgraded.

Is the BBC Unique?

Is The BBC Unique?

The BBC is the world’s oldest national broadcaster (it is also the world’s largest broadcaster by employee number) and periodically enters into discussions with the government and consults with the public over its funding and the difficulties it faces. For example, back in 2014, responding to a government inquiry, it argued that the licence fee was still ‘the most effective’ way to fund the corporation, and a recent public consultation over the future of the iPlayer ended in February 2019.

So how is TV funded in other countries? Well, licence fees are found in about two thirds of European countries but that is often combined with advertising and other revenue streams. The UK is joined by Denmark, Sweden and Norway as the only European countries where a public broadcaster doesn't have advertising or subscription as part of its funding mix. Public funding is less common in Africa and Asia and unheard of in North America.

In Serbia and Romania, TV licence fees are paid through electricity bills and since 2013, German households have had to pay a monthly broadcasting licence fee of almost 18 euros (£15) - 215 euros (£179) a year - regardless of whether they own a television or radio. Finland and Iceland recently abolished their TV licences altogether and introduced a tax that applies to all adults.

So, there are numerous approaches at work, which indicates that there is no single easy or obvious way to fund a national broadcaster. If there was, everybody would be doing it!

Viewers Who Don’t Need a Licence.

Viewers Who Don't Need a Licence

Now that entertainment broadcasting has evolved in the wake of huge technological advances and new business model opportunities, there is a generation of young people who have never experienced the dearth of content in the mornings before Breakfast TV was a thing, or been hyonotised by the small white dot at the midnight close down.

For these viewers, streaming services such as Netflix, Amazon Prime (and soon, the tsunami of copycat services led by Disney+) along with online tools such as YouTube has meant there has always been content available to consume immediately. The fact that it doesn’t come with a programme announcer or have its running time carved up with adverts is an advantage where speed and convenience are king.These viewers are happy not to be tied to a live schedule and if they can’t use iPlayer, well that’s no big deal as there’s now so much choice elsewhere to catch up on.

Threats, Rivals, Responses
More and more streaming services are lining up their launch windows, Disney+ (late 2019) has a huge array of fan favourite content from Marvel to Star Wars, then there’s Apple (due in April 2019) with its M. Night Shyamalan projects, Hulu (part of Disney but still charging for its edgier Marvel content), Criterion showing classic and arthouse movies (April 2019), plus virtually every major US TV channel and Hollywood Studio has plans to get involved with whatever content they can find in their dusty archives.

This is a serious long term threat because as more streaming and online services all try and take a piece of the pie, the BBC will find itself content and consumer challenged without a suitable response. The BBC film premiere for Christmas Day will no more - though it will be available on Disney+. Great! As long as you asked for a subscription for an Xmas present.

So the BBC has to persuade viewers that scheduled ‘live’ TV still has value over catch up services and it still needs to retain a piece of the action once the streaming feeding frenzy gets underway. Setting up alternative income streams, of which BritBox will be (presumably) just one, is a smart strategy which capitalises on the huge amount of content built up over decades of broadcasting which can be used under the ‘Best of British’ banner around the globe and at home.

What Will the New BritBox Streaming Service Mean For the Licence Fee?

Should we keep the TV licence?
There’s already plenty of grumbling about ‘paying twice’ for the same content - once with the licence fee to get it made in the first place and a second time to see it when it’s archived in a box set in BritBox after initial broadcast. This discontent may be assuaged by quality new content created purely for the service but there’s already too much out there to watch, who’s got time for more?

What Will the New BritBox Streaming Service Mean For the Licence Fee?ew Block

At the moment there’s been no official word about whether the service’s reported £5.99 per month subscription fee will impact the licence fee but it’s unlikely anything will change immediately. It’s hard to see the BBC ditching the licence fee since it ensures a policy of scrutiny and accountability and the all important neutrality - changing all that would be a political and financial minefield. Should BritBox fail to take off - and it’s entering a crowded market with powerful players at just the wrong time - then having a guaranteed annual income in excess of £3.8bn is a valuable fall back position.

Is The Licence Fee value For Money?

Is the Licence Fee Value For Money?

Of course, the licence fee actually allows you to watch dozens of live channels from the other terrestrial broadcasters too, so access to ITV, Channel 4 and Channel 5 provides even more choice which can be seen as value for money.

In 2009/10 the licence fee income of £3.6bn was spent roughly as follows:
  • 66% - TV
  • 17% - National and local radio
  • 6% - Online (BBC website and iPlayer)
  • 11% - Other (transmission and fee collection costs)
More recently, the income generated in 2017/18 totalled over £3.8billion. This compares with a Netflix income of £11.9bn for the year, of which £635 million was profit. The BBC is unlikely to see any significant upswing in income as the number of licence holders has been stable at around 25 million for the last 10 years. Indeed, that number may fall as the market becomes flooded with alternative services and a new generation, not wedded to established models of content consumption, eschew the licence and abandon traditional broadcasters - something that can already be said to be happening. So, while Netflix can tap into markets anywhere in the world, the BBC could well have peaked in terms of income based on the ‘publicly financed’ model, hence BritBox.
Should we keep the TV licence?
For the time being though, the licence based funding of the BBC ensures policies of transparency, impartiality and accountability are enshrined within its Code of Practice and these could be seen as setting it apart from its big business rivals.

Embarrassingly, there have been recent occasions where the implementation of these policies has fallen very short, one only has to look back at the Savile scandal and the imperious culture of the 1980s. More recently there’s been excessive salary concerns, bullying behaviour (Jeremy Clarkson) errors of judgement (the Cliff Richard property search coverage) and the gender pay gap. Clearly, the BBC gets it wrong from time to time but at least these mistakes play out in full view of the public as they are reported on, ironically enough, the BBC News channel, amongst others. Trust and reputation are dented in full view of its customers so the corporation has to work hard to be seen to be correcting these issues.

If the BBC became a subscription only service, would this accountability be driven underground and its impartiality compromised? Streaming services also have accountability but this tends to be to shareholders where the driving force for improvement and change could be said to be somewhat obfuscated.

So What Does the BBC Provide That Other Broadcasters Don’t?

So What Does the BBC Provide That Other Broadcasters Don’t?

Well, the BBC is about more than just entertainment. It reflects current values and gives communities a voice by providing language specific broadcasting resources (BBC Cymru) and reflects the cultural diversity that makes up modern British society (for example the BBC’s Asian Network radio service)

Its news reporting could be said to be one of the few trusted sources of fast-moving information as the internet becomes awash with data from so many sources it’s hard to see the wood for the trees. Again, the BBC is not without fault in this area and it was caught out using an image said to be from Syria that was actually from Iraq several years earlier. Generally speaking though, it appears the Beeb does not struggle in this area as much as online services tend to.

Should we keep the TV licence?
It’s hard to ignore the long association the British public has with the BBC and the feeling that it is an indelible part of our society and forms part of our British identity - the clue’s in the name!

Worth Keeping?

Worth Keeping?

The major streamers keep things fresh with new programming and investment is generally high but it's purely within the entertainment boundary since nobody tunes in to watch the Netflix News or Amazon’s Question Time - you turn to the Beeb for that. But the times they are a-changing and once the current generation of viewers are no longer around to remember the ‘Good Old Days’ (the rosy concept AND the variety programme) how relevant will the BBC be?

If we want the BBC to serve as entertainer, informer and social mirror it may have to evolve as all things do, because change is inevitable. But what is the best way to fund and facilitate that change? Continue with the licence? Subscription only? Something new?

Of course, evolution has another answer when responding to change too, and perhaps a broadcasting tarpit would be a mercy in the face of stronger, fitter species better suited for survival.

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