BBC licence fee: What could alternative payment models look like beyond 2027?
The Culture Secretary tweeted over the weekend that the licence fee model the BBC relies on would end when the current deal expires in 2027.
“This licence fee announcement will be the last,” Culture Secretary Nadine Dorries wrote on Twitter. “Time now to discuss and debate new ways of funding, supporting and selling great British content.”
The range of services currently provided amounts to about 43p a day — news, sports and entertainment output, all free from advertisements. The BBC has been part of the lives of every person in the country and has been for nearly 100 years — who hasn’t turned on the television, tuned into radio or gone online to consume content?
However, as we all know and experience, the TV landscape is now vastly different to what it once was. With the popularity of streaming services such as Netflix, Amazon Prime and BT Sport, how a person consumes TV content has changed immensely. Consumers are becoming pickier and want to be able to choose individual programmes to watch, when they want to watch them, on a device of their choice. And with a widening generation gap in news audiences, it comes as no surprise that this traditional model isn’t still relevant in the world we live in today — we are an “on demand” nation.
John Whittingdale, former Media Minister before the cabinet reshuffle in autumn, had previously indicated ‘core’ BBC services such as the news and children’s TV would still be funded by the taxpayer through a government grant. However, any additional content like sports would require an additional subscription fee, similar to the way we pay for other streaming services such as Netflix and Amazon Prime.
Whilst a subscription is obviously a more reliable business model with recurring revenue, for sporting events in particular, pay-per-view or purchasing a day pass is actually a better option. Sports channels often broadcast such a range of sports, from wrestling to curling and for your average football fan who just wants to watch their home team play, pay-per-view is clearly the better choice.
Generational differences also come into play when it comes to paying for content — whilst older generations may be more accustomed to signing up to services for the medium or long term, younger people want immediacy — accessing what you want, when you want it and choosing how you would like to pay for it.
Fundamentally, this comes down to consumer choice and the BBC will no doubt need to consider how best to provide that choice. We see a key need for carrier billing to be part of that.
Carrier billing provides consumers with the option of frictionless payments through their mobile number, something that almost everyone in the UK has. It is therefore, for all intents and purposes, a ubiquitous payment method!
Being able to pay so quickly also allows viewers to decide just before a programme or event that they want to pay for and watch it, meaning they won’t miss out on the action.
Whether it’s subscriptions, day passes or pay-per-view, each of these have been embraced by British viewers, so it’s time for television services to capitalise on this by making it as easy as possible when it comes to paying. They should be giving viewers what they want: their favourite shows on-demand, without the added faff.
The fragmentation of media consumption is here; there is the opportunity to break down barriers that until now, the license fee has not allowed.
It’s time to embrace change.