Most alternatives to Licence Fee would leave BBC underfunded | Major Businesses | Business | News | Rapid TV News
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Public and political appetite for sweeping changes to BBC funding may have dissipated due to the Covid-19 crisis, but research firm Ampere Analysis has examined a number of potential alternatives to the Licence Fee and found them all wanting.
Ampere BBC licencefee 17April2020
The analyst explored four possible alternative funding models which all have been mooted as possible replacements for the licence fee. The four funding mechanisms include: a shift to a subscription model, akin to Netflix or Sky; a move to fund BBC programming purely through advertising revenue; a levy on Internet service providers such as BT and Virgin Media; an income tax model.

In one of the key findings, and most popular alternatives cited, Ampere believes Fundamentally it is unrealistic for the BBC to match current income levels through a subscription fee. The BBC would need to sign up nearly 24 million households for a whole year, each paying £13 per month, to mimic current funding levels. Current market leaders Sky and Netflix have less than half this number of subscribers apiece.

Ampere’s analysis indicates that each of these models, with the exception of an income tax model, would struggle to generate sufficient income to cover BBC activities, necessitating a scaling-back of output or quality. Many would also have detrimental effects on other components of the UK media and communications economy.

The analyst observed that in the light of the Covid-19 outbreak, the BBC has found a renewed importance amongst the public, citing a recent Ofcom study finding 82% of the UK population were using the BBC as a source of news. In addition, BBC has responded to the current lockdown situation by boosting entertainment for viewers at home, as well stepping up education and health services.


“There’s no question that during the current Covid-19 pandemic it has become crystal clear just how important the BBC is for the population of the UK,” commented Ampere Analysis senior analyst Hannah Walsh. “The broadcaster has been quick to act, ramping up commissioning and amending its schedule. We've seen the daily updates on the current situation by the Prime Minister and Government health advisors, but there's also advice clinics on the radio, and specialised children's content, including educational programmes, BBC Bitesize online and child-friendly news updates.”

Ampere concluded that ultimately the BBC could not match the current income levels generated through the Licence Fee via most alternative funding mechanisms. It said that many of the models would have to be coupled with alternative funding support and would not work alone to support current output or quality.