18:55 GMT03 March 2021
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    The BBC's Director-General Tim Davie has stated the corporation would cost viewers over £400 per year if it stopped depending on mandatory TV license fees and became a subscription service like Netflix. However, it's unclear whether the company would manage to keep its viewers in that case, observers say.

    On 3 February, the BBC released a "Value for Audience" report describing how the corporation has saved money and cut costs over the past decade. According to the document, the company has managed to withstand growing global competition and an effective real-terms reduction in income, while continuing to be "very good value for money".

    "Taken together, a bundle of subscriptions providing advertising-free high-quality services comparable with those offered by the BBC across video, audio, and news would cost over £400 per year in comparison to a current license fee of £157.50", the report highlights.

    Is Subscription an Alternative to License Fee?

    Tim Davie, who took over the reins of the company in September 2020, has repeatedly rejected the idea of a subscription fee, warning it would make the BBC "just another media company serving a specific group". In light of the latest report Davie highlighted that the corporation is providing Britons with high-value content for less money.

    Davie's stance, however, was met with criticism by social media users who argued that the BBC should go subscription-based to see what the subscriber numbers are and what the corporation is actually worth.

    ​The corporation's statement that a bundle of subscriptions offered by the BBC would cost over £400 per year "is just very silly and assumes that large numbers of services would be added but with no viewers added", says Philip Booth, professor of finance, public policy, and ethics at St. Mary's University.

    "If the BBC became a subscriber-owned mutual, it could sell a whole range of packages to different kinds of viewers at different costs", he says. "It would be able to leverage its brand hugely internationally. Of course, if the BBC were unsuccessful or found that people only pay for it currently because the law requires them to do so, their revenue could plummet. However, people should not be forced to pay for something they do not want to watch".

    ​The BBC's total income in 2019/20 amounted to £4.94 billion with TV license fee revenues accounting for roughly 71% of total income, according to the House of Commons Library. The rest comes from commercial and other activities, including grants, royalties, and rental income.

    Watching live programmes in the UK without a license fee is punishable by a maximum penalty of £1,000, or, in rare cases, imprisonment. In 2018, over 121,000 people were convicted for evasion, according to the BBC. Decriminalisation of non-payment, considered by the government earlier this year, meant that failing to pay would become a civil offence, not a criminal one. 

    However, the UK government decided to leave the current criminal punishment on evading the license fee in place, which was hailed by Davie as the correct move.

    "Here, I believe it probably still has a point", says Booth. "Obtaining a service without paying for it can be either a criminal or civil offence. In reality, it probably would not make much difference if it were a civil offence. People would still be prosecuted for evading civil penalties".

    To add to the controversy, in August 2020, the corporation stripped about 3.7 million over-75s of their free licenses, leaving them only for households where someone aged over 75 receives pension credit. This prompted sharp criticism from some British MPs who called for free TV licenses to be restored to all elderly Britons over the age of 75. Speaking at a Royal Television Society talk in September 2020, Davie admitted that nixing free licenses for millions of over-75s was "unfair" and "not a good look".

    'British Gov't Needs to Step Up BBC's Funding'

    "I think you have to have a sustainable funding base to support public media", says Tom Mills, lecturer in Sociology at Aston University, author of "The BBC: The Myth of a Public Service". "And the review that was carried out by parliament reached the conclusion that any government would reduce the revenue and wouldn't be sufficient to address any inequities".

    The BBC should be funded by universal payment and does not have to come from license fees, according to Mills. At the same time, the author believes this "should be enforceable by the law in the same way that other public funds are". "I don't support the move to subscription because that means undermining universal access, which is a very important principle", he notes.

    "I support reducing the BBC's productions on other platforms, I don't think the BBC should be supplying content to other platforms, they should be supplying programmes to the people who pay for it, which is the government, the licensing [bit]", he says, adding that the government should increase funding for the BBC to tackle the corporation's 30% income slide over the last decade.

    The BBC continues to look into possible forms of funding to remain competitive. Last year, the corporation considered replacing the license fee with a new special income tax akin to the Swedish model, according to The Guardian. The Swedish tax was imposed on almost all taxpayers in 2019 to fund all of the country's public service broadcasters, with poorer people paying less. Citing a BBC insider, The Guardian noted that the corporation fears that "it would be a tough sell to add a new tax to people's payslips in the current political environment" and that the government would force the BBC to share more of its funding with other broadcasters.

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