BBC Funding Set For Overhaul After Next Charter Period
The BBC looks set to retain its licence fee during its next ten-year charter period, but could switch to a different funding structure in the following years, including the creation of a subscription only service, according to the Government’s leading advisor for charter review, Lord Burns.
Delivering a 24-page report on the Corporation to the Government yesterday, Burns summed up several key issues to feed in to a seminar of the BBC’s regulation and governance governance to be held tomorrow. According to the Labour peer, there is a “general (although not complete) consensus that the licence fee has played a crucial role in helping the BBC to maintain its independence from political and short-term commercial pressures.”
However, Burns claimed that the move to digital television and other technological advances are “likely to raise a series of challenges to the continuation of the licence fee in its present form.”
Amongst the alternative sources of funding suggested for the BBC in the report were subscription services, Government funding, mixed funding and income from advertising. The report stated that a subscription model for the BBC would “permit the extension of innovative market segmentation” whereby viewers could pay different subscription figures for first run programmes or those without adverts. Burns’ report stated that the scheme could “work with bundles of channels and potentially offer the public much greater choice about the broadcasting they receive.”
The report also suggested that future funding could be sourced from a Government grant, financed by taxation, to fund elements of the BBC’s public service broadcasting, in particular its news and current affairs output. However, Burns addressed concerns that a relationship of dependence on the Government would be unhealthy, especially with much of the Corporation’s news output centred on politicians and Government leadership, and would require closer attention in establishing “robust independence in these circumstances”
On the subject of advertising, Burns’ report claimed that some advertising may be possible on the BBC, but reiterated the findings of a recent Government report, claiming that advert-free content was one of the most valued aspects of the BBC. However, the report states that the provision of some advertising income would help to sustain the BBC’s services as being free at point of use while not excluding any viewers in the way that subscription viewing would.
The report also highlighted the use of advertising to fund BBC channels outside the UK, such as BBC America and BBC Prime.
Although the licence fee is currently seen as the favourite funding option the future, the report stated that it will become increasingly difficult to sustain in the long term, especially as conditional access becomes available.
Burns stated that it will be necessary to review the possibilities offered by conditional access systems before the end of the next BBC charter, proposing that a detailed examination of future funding procedures be undertaken half way through the next charter period, in 2011.
The forthcoming review of the BBC’s royal charter has resulted in several proposals being made for the BBC’s future. Amongst those tabled are suggestions for the BBC to delegate the running of some operations to rival broadcasters, in return for a slice of the licence fee (see Channel 4 Could Get Slice Of BBC Licence Fee).
Channel 4 has also made a plea to the Government for partial public funding, or financial assistance from the BBC, claiming that the cost of digital switchover will leave it with an annual funding deficit of £100 million (see Channel 4 To Seek Public Funding To Combat Sliding Share).
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