BBC Licence Fee Rise Set To Anger Commercial Rivals
Commercial broadcasters are to receive a further blow later today when the Government agrees to increase the licence fee by £4 per year, giving the BBC an additional £100 million of public money.
Culture Secretary, Tessa Jowell, is expected to make the announcement to Parliament later this morning, just weeks after warning that the licence would be not automatically handed to the BBC, when its charter comes up for renewal in 2006 (see Government Promises Review Before BBC Charter Renewal).
The increase, which is 1.5% above inflation, will give the BBC an additional £100 million of public money, on top of the £2.5 billion it already gets from the licence fee. The move is likely to face strong opposition from commercial broadcasters, which have seen revenues suffer as a result of the ongoing advertising downturn.
ITV, the UK’s largest commercial broadcaster, saw revenue fall by 4% year on year during December 2002, bringing it to below £125 million, down from almost £130 million in the same period the previous year. Channel 4 and Channel Five have also faced tough competition from an increasingly well funded and arguably commercially focussed BBC (see GEITF 2002: Liddiment Admits To Taking Too Many Risks).
Barry Cox, deputy chairman of Channel Four has already called for the licence fee to be abolished (see Government Advisor Makes Case For Licence Fee Abolition) and last week Granada chairman, Charles Allen, argued that the Corporation should lose 10% of its licence fee to fund public service programming on commercial channels.
Allen told a selection of industry figures at the Royal Television Society that the Government should “consider top-slicing 10% of the licence fee and earmarking that £250 million or so for new, additional public service programming on commercial channels.” (see Granada Chairman Calls For Slice Of BBC Licence Fee)
DCMS: 020 7211 6200 www.culture.gov.uk
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