Thoughts on the BBC Licence Fee

It’s hard not to believe that the Conservative government’s intentions are to encourage the BBC to self-destruct. It’s bright enough to recognise that the BBC has huge support from the public and therefore any overt interference would be a political problem. It’s much easier if the BBC itself seems to get worse, invests less into programming, suffer scandal after scandal and generally annoy it’s licence fee payers so much that it goes ‘pop’.

A quick and easy way to accelerate this it to lop off large parts of its funding whenever it can. In the last settlement the BBC’s licence-fee income was top-sliced for things like local broadband roll-out, S4C and local TV as well as taking on the funding of the BBC World Service. This time around, so far, it’s had to take on £750m of 75pluses licence fees – around 20% of its annual income.

However, there is a small silver lining. Even the Government has realised that the 75+ thing is potentially too devastating (well it would be if inflicted straight away). It’s slightly phased in over three years, the BBC will also see inflation-related licence fee increases and they can ‘charge’ for the licence fee.

The latter isn’t entirely correct. They’re not about to start a Netflix. Instead you will need a licence to watch the BBC iPlayer (due to the rules being old, you don’t need one at the moment).

The 75+ thing is also interesting. It’s up to the BBC whether to charge them or not. They’ve been getting licence fees for free since Gordon Brown introduced it and the assumption is the BBC will think the PR is too bad to start billing them again.

Change

Whilst none of this is ideal for the BBC, the scale of the change means that it can start to do some interesting things to prepare for its own future.

Subscription

If the BBC’s licence fee was replaced by traditional subscription today it would likely destroy it. Even assuming that two-thirds of people paid what they pay now it would be a completely different operation. Why do radio (it can’t be scrambled), news would be hard to support etc. It would spend significantly less on programming and therefore be less attractive to subscribers – a potential vicious circle.

The BBC has always worked hard to make it difficult to turn it into a subscription service. For example, part of the deal in saving ‘On Digital’ and re-birthing it as Freeview was that all the conditional-access (the subscription bits) were stripped out. Anything to make it harder for the government to suddenly subscription-ize.

Unfortunately (well, for the BBC) the rise of IP, Satellite and Cable as large-scale distribution systems means that the free-to-air trick will be harder to pull come the next charter renewal.

A licence-fee unconnected to consumption, and enforceable by prison is a lovely system to have, but I think this is probably the last ten years its going to be enjoyed.

 

The trick now, for the BBC, is to put in place the architecture and infrastructure so that when the change comes, that they are ready to make the best of it.

IP, iPlayer and Online

The ace card the BBC has is its internet-delivered services. The public like the BBC website and iPlayer and more and more people are consuming content on the move on non-TV devices. The public are also used to logging in to internet-services.

The ‘charging for the iPlayer’ new rule is the perfect opportunity to start building the BBC’s future subscription system.

iPlayer and Verify

The stock argument over logins for iPlayer are that people will share passwords a la Netflix and Sky Go. Indeed the fact that a household is licensed will mean they’ll have to issue multiple logins per licence fee. Easy to circumnavigate then?

Well, maybe not.

The Government is currently introducing their own login system – Verify. In fact it’s not its own system. Verify lets you prove your identity by using another service – a service who knows who you are. It’s a bit like when you login to a website with your Facebook credentials. The initial partners for Verify are Barclays, GB Group, Morpho, PayPal, Royal Mail, the Post Office, Experian, Digidentity and Verizon.

The BBC should adopt something similar. Fast.

The identity providers will know where you live, so if you had to auth your licence fee account, the first question it will ask is whether that postal address has a licence fee. In itself, that will stop the vast majority of people adding themselves to someone else’s licence.

I think, if no auth’d BBC login, no iPlayer access (on web, TV, mobile or tablet), no use of the BBC mobile apps and no use of the website. While we’re at it, why not make pay-TV platforms have to auth their subscribers the same way. They definitely know where you live. No licence fee, no access.

Yep – you’ll still be able to watch the TV or listen to the radio free-to-air on Freeview or DAB/FM – but that should be it.

Licence-fee payers should get used to this straight away. Indeed, I think it could easily be spun to prove the BBC is providing more value by keeping those non-licence fee payers away from the lovely BBC content that good citizens pay for.

75-pluses 

I think it will be hard to say no more free licence fees for over 75s. I think it would be the right thing to do. But it would be hard to defend.

But, let’s reduce their access. As an over-75 you get free access to free-to-air TV and radio and maybe (if we’re being generous) access to TV and radio through cable/satellite. What you don’t get is any access to BBC online services, they’re for licence fee payers only. If you pay up you get them. If you don’t, you won’t.

I’d wager that a great deal of the 65 year olds today are as big fans of iPlayer and the BBC website as the rest of the population. They’ll be used to paying the licence fee, they’d still like to get online, they’ll probably carry on paying.

Whilst there’s still the licence fee I want the BBC to create the best system for getting households who use it to pay. There used to be detector vans now we’ve got login screens.

Thin edge of the wedge?

Is all of this the thin edge of the wedge on the route to a subscription-only BBC. Yes, it probably is. However, to my mind, not doing this or something similar is akin to crossing your fingers and merely praying that a legally-enforcable TV licence fee is going to be around in ten years time. If the BBC keeps their head in the sand, come the next charter renewal a sudden shock change, a sudden move to subscription, really will decimate Auntie.

The opportunity now is to build the ultimate subscription system. To learn about consumers consumption and to ensure that when an element of subscription is introduced, that the BBC is ready to convert licence fee payers to subscribers and to continue to make outstanding programmes.

The other benefit of having this direct relationship with paying customers is in the future that they will no longer have to be at the mercy of the Government and commercial media that does everything it can to ensure it won’t exist.

Let the iPlayer set them free.

9 thoughts on “Thoughts on the BBC Licence Fee”

  1. Hi Matt
    I think it would be the death of the BBC as a risk averse, trusted and impartial producer and distributor of content if it moved to a subscription model.
    The OTT services for which consumers pay a monthly subscription only work on a multi territory basis. The UK is too small to generate enough revenue even if half the population subscribed to get anywhere near €3.5b pa. So subscription reduces the BBC to a domestic creator/distributor with substantially less scale than Sky or even ITV.

    If we want a strong BBC….and I do…then you have to maintain the principle of universality of access (and use) and universality of payment.

    As a small footnote, as someone who started in radio and still loves the medium, the abolition of the licence fee would spell the end of most/all BBC radio. That would be a huge loss.

    Cheers

    Paul

  2. The article makes very interesting reading but is based on the very misleading premise that a large percentage of the current license paying public actually care if they have a BBC at all. Do a straw poll of friends and family and I believe you would find that people just do not care anymore for the BEEB. It is seen as an old fashioned and very politically biased television corporation and not even all the charms of iplayer will save it. Licence fee or not the end is nigh for the BBC and Auntie is now the relative who has stayed far too long and must be bundled off on the number 37 bus to Goldrets Grern immediately.

  3. The BBC needs to start quickly looking at how it can replace the current ‘licence fee’ with a joint system of a lower cost ‘basic subscription fee’ for radio, BBC 1 & BBC 2, collected via the council tax as done in some other European countries, with an additional ‘digital subscription fee’ for iPlayer, website access, phone apps and any further TV channels that it wishes to run such as a first run drama channel.
    One of my suggestions for cutting costs would be closing all BBC MW transmitters and moving Radio 5 Live to use the local DAB and FM allocations of local/nations radio stations freeing up space on the BBC’s national multiplex for the other services. Local radio and nation stations would then have windows for local programming at breakfast and drive plus spots for local news and traffic as well as for local sports coverage.

  4. I don’t disagree with the first part of your comment. The problem with the second is that it would save just, maybe, £50m. The scale of the BBC funding shift means that it’s likely to be much bigger ideas that need to happen.

  5. Thanks Matt for your response.
    As I said my comment on MW transmission and local radio/5 Live is just one of my suggestions but I will be saving any further ones until we can see the government’s Green Paper on BBC Charter Renewal and we can then be part of any consultation process.

  6. I guess the central question is whether you consider the licence fee a transaction charge (ie you pay an annual fee and in return you get access to this content) or a tax (ie UK benefits from having a public broadcaster and this is your contribution towards making that happen). The problem is that the licence fee has fallen between the two stalls and the BBC has never really tried to answer where it sits on this question. Your suggestion pushes very much it towards becoming a transaction charge; whereas I guess I see it as a cultural tax.
    In the same way as I support that my taxes ensure that anyone can walk off the street and go and look at Constables, LS Lowrys, Rothkos etc; or learn about steam engines or dinosaurs or World War II or Victorian fashion; I like the idea that as a nation we offer a similar experience online and other media. Everything that can be commoditised shouldn’t be.
    I understand the arguments against it, but if the licence fee was included as part of general taxation, a rough calculation suggests it would cost less than £8 a month per tax-paying adult. That’s not including the savings made by not having to collect it separately.
    Do I think that it should simply all go to the BBC in the same way? No. I think there is a real argument for having a variety of organisations able to access this money; and I’d love to see an open-access channel (similar to what was proposed by the national DAB application you were part of), supported by this income. I think local TV missed a trick in thinking that our communities were simply built around location.
    But I do think the UK would be worse off for only having mass media that is interested in your wallet or selling your eyeballs to advertisers.
    PS. On the over 75s question, I think the BBC could reasonably change the rules from “households where a person over 75 lives” to “households where only people age 75+ live”. Without knowing the stats, I’m guessing it would reduce the number of qualifying households quite substantially.

  7. Well as is common with many others this article focuses on the BBC (sort of old school TV, sort of new school media wannabe). But what of the media landscape in the next ten years? do you think Google, Amazon Netflick, Facebook, Apple etc. are going to wait and see what happens. Nope, it is state intervention in an open commercial market place, it is indefensible, no matter how you romance about ‘Auntie’. Or imagine what might be done with the’law’ and the licence fee system. It is irrelevant. Iplayer has already destroyed scheduled live to air TV and must continue to do so by producing it’s own exclusive content in order to keep up with the competition. Until it becomes basically a pay to view commercial operation like all the others. The BBC owns virtually no outside broadcast facilities any more, no television centre, or it’s satellite dishes, and as far as i am aware not re-signed with RED BEE to transmit the daytime schedule, whilst having sold the buildings that it transmits from in West London. And finally BBC worldwide plenty of money out re-purposing content paid for by the licence fee whilst the over 75s don’t use the internet and won’t be watching TV once the transmitters are out of contract. It’s over, the Broadcast Industry has been decimated and it is not coming back, it is dying. I should know I have been a freelancer in it for 20years. So what exactly are you paying for, the pension fund?

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