Excellent article, it really shows the financial cliff the Beeb is facing. Keeping the licence fee is really just a slow death, it simply can’t stay. But the question really is how do you fund it?
If it runs adverts, then ITV/C4/C5 likely collapse. It could go into general taxation, but let’s be honest, that just means constant cuts. It could try subscriptions, but that goes against "free for all," so you're left, I think, with two options:
1) It moves to the council tax: More progressive, but it would be attached to the second most unpopular tax in the UK after the licence fee.
2) You move it to broadband and mobiles: Probably a £3 or so monthly levy could cover this—most would pay less than they do now.
I think option 2 is the only way to do this. You could bring it in at, say, 50p, call it some random name like culture levy, and not link it to the BBC, but put the cash in a "culture fund." Then, every year, increase it in line with when broadband suppliers already increase fees. In five years, you could get it up to £3 and no one would notice.
Then you announce the licence fee is scrapped and say it's being paid for by this fund. No one would really know or care because they would be used to paying the levy.
At the same time, you get hold of BBC Studios and give them a very strict target of growing BritBox to 10 million subscribers in 4 years, 15 million in 8 years, and 20 million in 10 years—there is no reason that can't be done.
They have 4 million subscribers now, but it only shows dramas and is only available in 4 countries! Just adding News, kids' shows, and Doctor Who would increase the subscriptions. Plus, the BBC knows at least 6 million people in places like Spain and Dubai access iPlayer without really paying. Once you get BritBox to the 20 million mark, we’ll start to see a flywheel effect happening, and the BBC will slowly become more self-funding.
Thanks very much for your comment Andrew. I agree that a broadband levy ought to have featured more prominently as part of Charter Review, though Lisa Nandy's very early 'no new taxes' statement seemed to blunt it getting considered at all.
I wrote a bit of analysis around BBC advertising in the previous Whose Beeb post, but definitely want to explore the commercial side in more detail. The Government's Green Paper put a lot of stock in 'growing' BBC Studios as a way to avoid proper public funding reform. I seriously doubt the opportunity is there in the highly competitive global streaming market to achieve anything more than modest revenue year on year - and certainly not enough to offset a stagnant/unreformed licence fee!
The government says they’ve ruled out new ways to pay for the license fee, but I suspect they haven't really thought it through. You could literally start by adding 50p to monthly broadband and mobile subscriptions, phase it in slowly and no one would even notice.
Regarding BBC Studios, the problem is it’s not laser-focused. It’s trying to grab money from everywhere, work-for-hire, distribution, FAST channels, etc. But if you look at the numbers, the money really only comes from two places: Bluey (roughly £100m a year) and BritBox/FAST (another £100m). Out of £2.1bn in revenue, they only make £225m in total profit.
Anyone can see the money is really about two things: IP and BritBox. The BCP Framework clearly explains how to handle the IP and what laws need to change to fix the current mess.
It also gives a clear way to drive BritBox subscriptions. Just look at what a "do nothing" strategy looks like: BBC Studios' own current plan expects BritBox to hit around 8 million subscribers. Even at that level, it becomes their biggest revenue stream outside the license fee.
Now, look at what a "Do Nothing Plus" strategy looks like:
- Content First: Make BritBox the place where content goes first. BBC licensed Happy Valley to its direct competitor, Acorn, before putting it on BritBox! They still don’t even have the Tennant/Smith Doctor Who eras on there.
- The Free Tier: Add a free tier with BBC News and some FAST channels. Use ads just like they already do elsewhere.
- The Kids: Add kids' shows to BritBox - unbelievably, they don’t even have them on there yet.
- Radio & Podcasts: Include the World Service, Radio 4, CBeebies Radio, etc.
If you really want to get adventurous:
Open up in more than 4 countries!
Use the distribution channels for Amazon, Apple, and Roku to get in front of everyone.
These are just the obvious things; the framework has many more.
The Bottom Line is BBC Studios is aiming to "double its business" by 2028. The BCP shows that by simply focusing on IP and the Platform, the two things that actually drive the profit, the BBC could be returning a minimum of £1.2 billion annually. The BCP says this is just one stream of income. We dont even give it all to the BBC, we could use it to support the wider creative industry, including journalists, and give the public a real choice on how to spend that pot of money all by keeping the BBC open and accessible to all
Excellent article, it really shows the financial cliff the Beeb is facing. Keeping the licence fee is really just a slow death, it simply can’t stay. But the question really is how do you fund it?
If it runs adverts, then ITV/C4/C5 likely collapse. It could go into general taxation, but let’s be honest, that just means constant cuts. It could try subscriptions, but that goes against "free for all," so you're left, I think, with two options:
1) It moves to the council tax: More progressive, but it would be attached to the second most unpopular tax in the UK after the licence fee.
2) You move it to broadband and mobiles: Probably a £3 or so monthly levy could cover this—most would pay less than they do now.
I think option 2 is the only way to do this. You could bring it in at, say, 50p, call it some random name like culture levy, and not link it to the BBC, but put the cash in a "culture fund." Then, every year, increase it in line with when broadband suppliers already increase fees. In five years, you could get it up to £3 and no one would notice.
Then you announce the licence fee is scrapped and say it's being paid for by this fund. No one would really know or care because they would be used to paying the levy.
At the same time, you get hold of BBC Studios and give them a very strict target of growing BritBox to 10 million subscribers in 4 years, 15 million in 8 years, and 20 million in 10 years—there is no reason that can't be done.
They have 4 million subscribers now, but it only shows dramas and is only available in 4 countries! Just adding News, kids' shows, and Doctor Who would increase the subscriptions. Plus, the BBC knows at least 6 million people in places like Spain and Dubai access iPlayer without really paying. Once you get BritBox to the 20 million mark, we’ll start to see a flywheel effect happening, and the BBC will slowly become more self-funding.
Thanks very much for your comment Andrew. I agree that a broadband levy ought to have featured more prominently as part of Charter Review, though Lisa Nandy's very early 'no new taxes' statement seemed to blunt it getting considered at all.
I wrote a bit of analysis around BBC advertising in the previous Whose Beeb post, but definitely want to explore the commercial side in more detail. The Government's Green Paper put a lot of stock in 'growing' BBC Studios as a way to avoid proper public funding reform. I seriously doubt the opportunity is there in the highly competitive global streaming market to achieve anything more than modest revenue year on year - and certainly not enough to offset a stagnant/unreformed licence fee!
The government says they’ve ruled out new ways to pay for the license fee, but I suspect they haven't really thought it through. You could literally start by adding 50p to monthly broadband and mobile subscriptions, phase it in slowly and no one would even notice.
Regarding BBC Studios, the problem is it’s not laser-focused. It’s trying to grab money from everywhere, work-for-hire, distribution, FAST channels, etc. But if you look at the numbers, the money really only comes from two places: Bluey (roughly £100m a year) and BritBox/FAST (another £100m). Out of £2.1bn in revenue, they only make £225m in total profit.
Anyone can see the money is really about two things: IP and BritBox. The BCP Framework clearly explains how to handle the IP and what laws need to change to fix the current mess.
It also gives a clear way to drive BritBox subscriptions. Just look at what a "do nothing" strategy looks like: BBC Studios' own current plan expects BritBox to hit around 8 million subscribers. Even at that level, it becomes their biggest revenue stream outside the license fee.
Now, look at what a "Do Nothing Plus" strategy looks like:
- Content First: Make BritBox the place where content goes first. BBC licensed Happy Valley to its direct competitor, Acorn, before putting it on BritBox! They still don’t even have the Tennant/Smith Doctor Who eras on there.
- The Free Tier: Add a free tier with BBC News and some FAST channels. Use ads just like they already do elsewhere.
- The Kids: Add kids' shows to BritBox - unbelievably, they don’t even have them on there yet.
- Radio & Podcasts: Include the World Service, Radio 4, CBeebies Radio, etc.
If you really want to get adventurous:
Open up in more than 4 countries!
Use the distribution channels for Amazon, Apple, and Roku to get in front of everyone.
These are just the obvious things; the framework has many more.
The Bottom Line is BBC Studios is aiming to "double its business" by 2028. The BCP shows that by simply focusing on IP and the Platform, the two things that actually drive the profit, the BBC could be returning a minimum of £1.2 billion annually. The BCP says this is just one stream of income. We dont even give it all to the BBC, we could use it to support the wider creative industry, including journalists, and give the public a real choice on how to spend that pot of money all by keeping the BBC open and accessible to all