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Is the BBC really Justified?

Photo: REUTERS / Scanpix

 

We all know about the BBC license fee in the United Kingdom and the fact it has been a debatable topic for years which has been a discussion in the houses of parliament recently. So, it gives the public a 50/50 chance of it staying or going. The license fee came about in the UK on the 1st June 1946 and has been in our homes for 70 years. Is it time that this outdated scheme stops due to time moving on and everything is changing in the way we receive our telecommunications. The license fee offers a vast range of services such as ten television channels, fifteen network stations and local radio, BBC Online and iPlayer, Other service and production costs and license fee collection and pension deficit costs (BBC Annual Report 2013/2014 – Better value for money). Even though they offer a vast amount of services for as little as forty-pence a day it’s not particularly a way of upholding an argument when 51% of the British public, that participated in the survey, want to abolish the fee. This will examine the BBC license fee not being able to be justified in the way they are forcing the public to pay for a license fee. So, is the BBC license fee justified?

James Murdoch chairman of the media giant News Corporation, son of Rupert Murdoch CEO of News Corp, analyses the ‘dominant’ BBC license fee and its historical context in his speech. The most vital part of his speech was

“Being funded by a universal hypothecated tax, the BBC feels empowered and obliged to try to offer something for everyone, even in areas well served by the market” (Ross, 2014)

From what James Murdoch says above he was referring to the BBC having so much power that it effects the creative industry through it’s dominance. Where as, other organisations will have moments when they are doing well and moments doing bad, but the BBCs income is safe and growing. This has an effect on the private news organisations such as SKY to ask their consumers to pay for news were as the BBC offers free news as long as the license fee is being paid. The BBC offering free news may be an advantage but it’s a way the BBC can be deemed as unjustifiable due to it being an unfair game to the rest of the news corporations that are currently out there.

James Murdoch has also made an attack on the BBC saying they threaten independent journalism in the United Kingdom. He believes that other media companies are also struggling as advertising revenues have dropped. This has become a result in the BBC being free from advertisements as there revenue is coming from the TV license so no matter what goes on the BBC will never face a problem with decline in money as such. For example, News corporation is the largest shareholder in BSkyB and they had a loss of $3.4 billion (Murdoch attack on dominant BBC, 2009) because of advertisement.

The BBC license fee has become something that has become ‘outdated’ as the internet revolution made an impact and the fact that watching programs online is free of charge as long as it is not live television then the license fee has no effect. Research that was done by Ofcom brought to light that half of young people now watch television (View, 2015). This is due to everything being accessible with just a couple of clicks online as a fair amount of young people have mobile devices, computers and game consoles. The chairman of the culture, media and sports committee, John Whittingdale has spoken about the BBC license fee and the committee believe that

 “becoming harder and harder to justify” (No long term future BBC license fee, MP says, 2015).

The culture, media and sports committee has said they do not think the TV license does not have a long term future as a way of a funding scheme in the United Kingdom, but is here for another 10 years, at least. When the committee said it is ‘harder to justify’ they were talking about given the changes of media and how it has become evolved over the years given people a new option to consume media.

The committee suggested that every house could be paying a new compulsory levy. Despite there being a new levy it still means it is compulsory which is still the worst part about the BBC and why it is so hard to be justified in this day and age.

The BBC license fee has been a discussion with the government in the UK and are trying possible ways of funding the license fee as John Whittingdale had mentioned

 “In the short term, there appears to be no realistic alternative to the license fee, but that model is becoming harder and harder to justify and sustain.” (No long term future BBC license fee, MP says, 2015).

Going back to a point previously, Whittingdale mentioned the BBC license fee will still be here for another 10 years due to it being the least worst way of funding the corporation. Even Though, Whittingdale is saying its ‘outdated’, ‘unsustainable’ and said it’s “worse than the poll tax’ he suggested that the BBC annual rate of £145.50 could see an increase when the BBCs charter is renewed at the end of the year.

The UK is not the only country with the license fee but they go a different way around it and not expect the payment once yearly but monthly which seems to work much better. Countries such as the Netherlands, Finland and France all have different ways in which their public body can pay for a TV license and the United Kingdom should think about taking in to account what these countries are doing.

In the Netherlands the idea of the license fee was abolished in 2000 because it was costing too much money to collect. The way the public pay now is their income tax as they pay for public TV and Radio. The broadcasters are also generating money through advertising as they are allowed to transmit commercials between programs The way in which the Netherlands collects their TV license must be rather successful through price and routine payments due to 95% of households in the Netherlands are connected to a cable provider (TV licence fees around the world, 2007). Could the UK possibly steer towards a monthly payment like a subscription?

John Whittingdale mentioned that the BBC license fee to be part funded by subscription would be open for a discussion int the governments charter review later this year.

 “It may come in time and, at that time, it is possible that we could adopt a part-funded by a compulsory fee and part-funded by subscription [system], but we’re not there yet” (Perraudin, 2015)

Above is a quote from what John Whittingdale has said about the fee, so it will be a possible scheme for a new way of funding which gives the public hope in some sense. In the Future Report done by the culture, media and sport committee, paragraph 233, specifies that they should investigate the advantages and disadvantages of a household levy which has also been spoken about by Whittingdale.

The Finnish system is another system that does things differently and takes in to account the people of a lower income. The way the system works in Finland is through a personal tax that must be paid by individuals regardless if they own a TV set or watch TV. The current rate is for Finland’s national broadcasting company (YLE) is for individuals where 0.68% of their income but with upper maximum contribution of €143. If a persons contribution is calculated below €51 then that individual does not have to pay (The Stationary Office, 2015).

The nature of the YLE tax and the lower limit meaning individuals on a low income pay a smaller amount or not pay for the TV license at all. For example, students on a low income or have an income through loans and grants would have to pay a smaller fee or nothing at all.

The United Kingdom could benefit from this greatly as individuals would not have to pay for a TV license because of low income and then the money can be used else where for other utility bills without worrying about the TV license fee. It would be great for those on minimal benefits and University students.

The system that France uses is a good way to save the country and government a fair amount of money in collecting the license fee tax as countries such as the Netherlands had abolished the license fee due to the costs of collecting was becoming extortionate. The TV license in France is collected with the french equivalent of their council tax.

“With one advantage being the collection of a license fee with another tax or through a utility bill is that the collection costs can be shared with another body and reduced” (The Stationary Office, 2015).

These three countries all have a great and a much more better way of collecting the TV license that wouldn’t cost as much to collect, more efficient for individuals in the UK and the fact that these are all great ways that the TV license in the UK could use as a new funding scheme for the BBC.

The BBCs charter review is close and the way the BBC is funded is up for discussion in the house of commons and chapter six of the Future Report contains ‘alternative models for funding PSB’.

If people watching catch up television online is a problem for the BBC as people who solely watch catch up do not have to pay for the BBC license fee. If the BBC wanted a new way of funding then the Internet license fee could be the way forward as they do not make money from their website as the license fee covers the payment. In other words the TV licensing system from Germany where the fee covers watching live television on TV, mobile devices, computers etc. This would ensure that the BBC is still making money and not making loss. The BBCs technology chief, Erik Huggers, has expressed the concern for

“viewers are getting ‘a free ride’ by watching its shows on the internet rather than on television” (Cable, 2010) 

A household levy was mentioned in the BBCs future Report, from Germany’s TV licensing system where the fee you pay is for the household itself which includes internet streaming to live television as well as the television set.

There is also other ways that could be a possible funding scheme for the BBC such as a pay monthly subscription like SKY and Virgin packages. This way could be a another great way for a new funding scheme for the BBC due to it being a more easier way of paying for a service and those with SKY and Virgin should not have to pay for the TV license as they are already pay for a subscription.

The ideas produced could be a possibility for the new TV license fee scheme in the near future that could replace the ‘outdated’ and ‘unsustainable’ structure of the fee that has been with us for around 70 years.

The culture. media and sports committee was appointed by the house of commons to discuss the future of the BBC and the ways in which the BBC could be funded due to the charter review coming up at the end of the year. As I have mentioned the Future Report through out the essay this section will explain what is in the report in a more better, and hopefully, understanding if the BBC is justified or not. The report is in place so a clear vision for the BBCs future can be determined and if the license fee is staying or not.

“There currently appears to be no better alternative to funding the BBC in the near-term other than a hypothecated tax or the license fee. However, the principle of the license fee in its current form is becoming harder to sustain given the changes in communication and media technology and changing audience needs and behaviors.” (The Stationary Office, 2015).

The Future Report itself even states that the BBC license fee is not exactly the way forward and need to change the ‘outdated’ hypothecated tax. It also mentions the fact that a subscription fee could be a possible way forward in the summary but has other options for a new funding scheme in chapter 6 of the report.  

The advantages of the BBC license fee is the fact that it is straight forward, you pay a fixed rate once a year. It was put in place to maintain the BBC’s independence from commercial and political considerations. It’s the fact that the fee allows the BBC sufficient income to benefit from economies of a scale (The Stationary Office, 2015).

Secondly, the BBC does not use product placement either as it is stated in their guidelines under section 14 where it is prohibited to use product placement for license fee funded services under the BBC agreement. This is a plus for the BBC as it makes them different from other channels and gives them a unique selling point (Editorial Integrity: Product Placement – Editorial Guidelines, n.d.).

As well as advantages there is disadvantages of the license fee that would be more beneficial to the public. First of all, everyone pays the same regardless of the income or size (The Stationary Office, 2015). of the household which is what Finland’s government considers. The fact that the license fee is compulsory for homes with a TV even if they do or do not consume the BBC’s services have no choice but to pay. As Humans we should have a right of choice if we want the BBC services in our homes or not. Also, homes that watch only catch-up TV online, listen to radio and/or use BBC online get a free ride and this is the TV licenses biggest loop hole. If we had an option to choose then there wouldn’t be no problem with the fee evolving (The Stationary Office, 2015).

So, is the license fee justified or not? The answer to that has got to be no. The reason being is that the TV license is ‘outdated’ and ‘unsustainable’ as mentioned by John Whittingdale. A slight majority vote, 51%, of the British public wanted it abolished and one of the main reasons can be deemed by the public being forced to pay the license fee. Everyone doesn’t consume the BBC as Ofcom’s research found that only half of young people consume the BBC.

We have moved in to the digital age with a vast amount of technology available at hands reach is phenomenal. Going from being so fascinated about the new technology as a child and now in the present time all the technology we we’re fascinated about is ere.. We are, as a nation, more involved with technology and are looking forward to the new and glorious ways of what technology can bring us in the future, just like a child. The fact that technology is growing so fast and there being other ways, then the BBC, to consume television time. The BBC needs to grasp the concept as well as taking into account what other countries are doing about their TV license and adapt to such changes due to the TV licensing being 70 years old. ‘outdated and ‘unsustainable’ would describe it best.

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