Licence Fee to be reviewed as UK government warns BBC to evolve or be next Blockbuster | Major Businesses | Business
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Fears that the new Conservative government would demand a shake up in the BBC and how it runs have been realised after Culture Secretary Nicky Morgan had fired a number of shots across the bows of the corporation warning that changes had to be made in order to stay relevant.
BBCannualplan 25Oct2019
In a wide ranging speech about the corporation including how it is funded, how the Licence Fee is collected Morgan actually compared the BBC to now defunct video rental service Blockbuster warning that similarities between the two organisations existed.

Morgan began her speech by noting that one of the great pleasures of being Secretary of State at the UK’s Department of Culture Media and Sport (DCMS) was having an insight into what she called the remarkable and unprecedented change that is taking place within the UK media sector.

Yet, and potentially worryingly for the BBC, she reminded her audience that when Netflix launched in 1997, Blockbuster was the heavyweight of video rentals, with almost 3,000 stores around the globe, and that three years later, when Netflix, then with a mail order delivery model, came to Blockbuster and proposed a 50 million dollar merger offer Blockbuster felt confident in turning them away. She pointed out that Netflix was now worth $65 billion dollars and that Blockbuster has gone from thousands of stores to just one shop in Oregon which has remained open as a of museum for people who want to see what a video cassette looked like.

The point of her analogy was that Netflix realised how the media industry was going while Blockbuster was too slow to move until it was too late and that today’s broadcasters which did not remain relevant would find themselves left behind by viewers. She warned that public service broadcasting is too important to allow it to become a historical relic like Blockbuster.

Morgan saw this as an opportunity to note how in a changing media landscape how the government wanted to make sure that the BBC and the British broadcasting sector as a whole remained relevant. That meant, she warned, the government had to consider where the sector needed reform, to ensure that it worked for our society and the economy, and for those who fund it.

While recognising the huge creative output of the BBC and that it was seen as a beacon of British values, Morgan said that it was worth recognising that in 2018, the BBC still spent over four times as much on original UK programming as Netflix, Amazon Prime and all of the other subscription streaming services put together. She added that she truly believed that, no matter how well-funded the international streaming giants are, British broadcasters remained essential and that PSBs were best placed to create programming with British viewpoints and identities that meet British audiences’ needs.

Yet, quoting 2019  research from UK broadcast regulator Ofcom that showed a massively changing media landscape especially among younger viewers whose first call now was to the SVOD giants, Morgan sais that the world in which the BBC was created, and the Licence Fee was established, has changed beyond recognition.

“We need to think carefully about what we all want the BBC - and indeed public service broadcasting more generally - to deliver for the years ahead,” she said. “The BBC’s role is not just to meet the demands of today, but to be ready to meet those of the future. And as we move into an increasingly digital age, where there are more and more channels to watch and platforms to choose from, it is clear that many people consider it an anachronism that you can be imprisoned effectively for not paying for your TV Licence.”

One of the first changes that she proposed was decriminalisation of failure to pay the Licence Fee. She said that the government wanted to ensure a proportionate approach to Licence Fee penalties and payments, and that there remain legitimate concerns that the criminal sanction for TV Licence Fee evasion is unfair and disproportionate. The government would the launch an eight-week public consultation on whether to decriminalise TV Licence Fee evasion.

Morgan then turned to the mid-term, looking at the period after the negotiations for the next Licence Fee settlement, that is between 2022 and 2024 when the mid-term Charter review will take place. This will look at the BBC’s governance and regulatory arrangements and Morgan confirmed that ahead of the next Charter Review process the government would undertake a detailed look at the future of the TV Licence model itself.

Concluding her speech, Morgan confirmed that the Licence Fee would remain in place for this Charter period, which ends in December 2027. However, she stressed that it had to be ‘open minded’ about the future of the Licence Fee beyond this point. Onlydays ago the BBC announced that the fee would rise £3 to £157.50 a year.