A FUTURE FOR PUBLIC SERVICE TELEVISION CONTENT AND PLATFORMS IN A DIGITAL WORLD

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A FUTURE FOR PUBLIC SERVICE TELEVISION arm’s length. But recent history suggests that the licence fee does not make the BBC any less vulnerable to interference and it is also a notably regressive form of taxation, charged at the same rate to every household in the country. So a new mechanism must be found, one that is fair, transparent and likely to remain robust for decades to come. The government initially outlined three options ahead of charter review: a reformed licence fee, a household payment, or a hybrid licence fee and subscription model. 148 (Advertising was rightly rejected by the government – it would be resented by viewers and would not even be welcomed by rival broadcasters). 149 The idea of a household payment merited scarcely a mention in the white paper. Instead, on the basis that “it commands wider public support than any other alternative model”, 150 the government agreed to continue with the licence fee until 2027 with the proviso that anyone using the iPlayer would also have to pay the licence fee, thereby ending the loophole that has meant that those using the iPlayer only for catch-up rather than live sreaming (and who do not already own a TV set) do not have to pay the licence fee. The white paper says that while there are no plans to replace the licence fee with subscription funding, it is very supportive of a pilot project developed by the BBC “to “consider whether elements of subscription could provide a more sustainable funding model in the longer term.” 151 Some have argued that a hybrid model will have potential benefits in terms of a possible uplift to BBC income and a fairer distribution of the costs of new services to those who use them most. However, we believe that such a hybrid system would be a worrying precedent in which subscription may come to be ‘normalised’, thus undermining one of the central platforms of the BBC: the fact that its services are free at the point of use and thereby accessible to all. Even a partial subscription model could be the ‘thin end of the wedge’ allowing for a full subscription model at a later date which, by definition, would exclude those unable to pay from whatever services were placed behind the paywall. This is all the more likely given that closing the iPlayer loophole will require conditional access technologies which will make a shift towards subscription that much easier. We are firmly against changing the BBC from a household charge service to one based on per-user controlled access. It is the very universality of the licence fee that guarantees the BBC scale and allows it to aspire to reach everyone in the UK. Indeed, the mere existence of a pilot subscription scheme may persuade the government that, should licence fee collection rates continue to fall despite the closure of the ‘iPlayer loophole’, a pay TV model may then become the ‘default’ position for funding the BBC. In this situation, the lure of portability – the ability of users to log in to BBC content wherever they are in the world – needs a strong and imaginative response. We believe that change is necessary in order to future-proof the BBC against ongoing technological change and that the ‘television licence fee’ is an outdated symbol of a broadcast landscape in which the TV set was the only receiver available. So we believe that the further extension of the licence fee 148 BBC green paper, 2015, pp. 102-105. 149 Ibid., p. 101. 150 BBC white paper, 2016, p. 92. 151 Ibid., p. 103. 60
CONTENT AND PLATFORMS IN A DIGITAL WORLD is a missed opportunity for more radical and durable reform following the principles that we outlined in Chapter 2. We would prefer a household levy, modelled on the system in Germany that allows for exemptions for the low-paid and those with disabilities. A household payment, ringfenced for BBC services, could be collected through Council Tax which would partially mitigate against the regressive nature of a flat licence fee. We also think that serious consideration should be given to funding the BBC through general taxation at a sustainable level protected in legislation. Such a levy could be styled the BBC levy, and it should fund only BBC services. No longer should the BBC have to bear the costs of projects that the government ought to be funding. Nor should the levy be ‘top-sliced’ to pay for other broadcast projects as was so often trailed during the charter review debates. Both of these options would also put paid to what we sense might otherwise be a gradual shift towards subscription funding. It is essential whatever funding mechanism is eventually decided on, that the process of setting the level of funding is conducted independently of government. The two most recent licence fee settlements were far from transparent and it remains unclear how the new process for setting the licence fee will ensure that this is not repeated despite plans for limited parliamentary scrutiny of the figure submitted by government. The white paper firmly rejects the proposal that the licence fee should be set by an independent body on the basis that it is a “tax”. 152 Yet for 80 years, the licence fee was seen as a ‘service charge’ and it was only when it was reclassified by the Office for National Statistics in 2006, that it was effectively integrated into government spending plans. We propose that the government revisits this reclassification in order put some distance between the BBC’s assets and liabilities and those of the national accounts. Furthermore, we would like to see decision-making over funding levels handed over to an independent advisory committee – along the lines of the School Teachers’ Review Body that advises the government on teachers’ pay. Either way, we agree with the claim by King’s College’s Martin Moore that if “the process of renewal and settlement was set out within legislation, or within the Charter itself, then it would not be possible to agree a licence fee settlement between the government and the BBC in a fortnight.” 153 Above all, it is crucial that the level of the BBC’s funding is set sustainably to bring an end to continual cost-cutting and debilitating uncertainty. This is not just about protecting the BBC, but about bolstering the wider creative industries in the broadcasting ecology that depend in no small part on the BBC. While we recognise that any new system of funding must be carefully thought through, it would be far more effective to switch to a new model while both the BBC’s popularity and the licence fee’s penetration remain very high. To abandon the licence fee, if not the principle of public funding, would represent a major change after almost a century but this does make the need for meaningful reform any less urgent. 152 Ibid., p. 98. 153 Martin Moore, Better protecting BBC financial independence: An exploratory report for the BBC Trust, January 2016. 61
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A FUTURE FOR PUBLIC SERVICE TELEVIS
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Contents Foreword by David Puttnam
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To instruct democracy, if possible
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Welcome Television is leading a cha
Page 9 and 10: CONTENT AND PLATFORMS IN A DIGITAL
Page 11 and 12: PSB channels 71.9% All other channe
Page 15 and 16: Why television matters Television i
Page 19 and 20: 1982 1990s 2012 The BBC-ITV duopoly
Page 23 and 24: Time for action Today’s policymak
Page 29 and 30: Basic principles At the core of pre
Page 39 and 40: The multichannel revolution Perhaps
Page 51 and 52: The BBC For most people, the BBC is
Page 59: CONTENT AND PLATFORMS IN A DIGITAL
Page 67 and 68: Channel 4 If the BBC is the most im
Page 71 and 72: Only 8% of Channel 4’s total spen
Page 79 and 80: ITV and Channel 5 The focus of atte
Page 85 and 86: The changing face of ITV 1993-2002
Page 91 and 92: New sources of public service conte
Page 103 and 104: Television and diversity We have ea
Page 107 and 108: THE PEOPLE SHOULD BE TELEVISED If t
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CONTENT AND PLATFORMS IN A DIGITAL
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Nations and Regions Public service
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Content diversity One of the key wa
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Sports content now accounts for som
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Talent development and training In
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Conclusion Television is changing.
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Recommendations General The UK’s
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Appointing the BBC board Sir David
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APPLICATION OF THE NOLAN PRINCIPLES
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BAFTA members’ survey delivered i
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Public service broadcasting, public
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Inquiry events Do we still need pub
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Acknowledgements Inquiry Report Con
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A FUTURE FOR PUBLIC SERVICE TELEVISION CONTENT AND PLATFORMS IN A DIGITAL WORLD

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