July 9, 2015    5 minute read

BBC – Time to Reform

   July 9, 2015    5 minute read

BBC – Time to Reform

Following the recent terrorist attacks in Tunisia, where 30 Britons died, the government invited MPs to consider the possibility of an enhanced role in tackling the Islamic State in Syria. However while MPs were divided over what Britain’s role in the region should be, there was an area of agreement across the political spectrum: namely condemnation of the BBC’s decision to refer to the group as ‘Islamic State’. Both prior to and after the attacks the BBC has come under sustained pressure to choose an alternative name, with politicians as ideologically opposed as David Cameron and Alex Salmond demanding a different approach.

Such hostility will continue as the government and BBC enter negotiations to renew the BBC charter. Many MPs within the Conservative Party have heavily criticised the BBC for leftward bias, most notably during the 2015 General Election. This has led to calls for fundamental reform of the organisation, such as through decriminalisation of non-payment of the BBC license fee.

The BBC itself received £5.166bn in income during the 2013-14 financial year, with over £3.726bn received in license fee payments. These cost approximately £145.50 pear year for a family who has one, and is required in order to watch live TV in the UK, although catch-up services such as BBC iPlayer can be watched without one. In the 2013-14 financial year approximately 25,419,296 people paid this. However this is less than had initially been predicted by the corporation. Recent increase in costs and fall in revenue has forced the organisation to cut 1,000 jobs, in an attempt to make up a £150m budget shortfall. This is expected to save £50m per year. These challenges are expected to increase in the future, particularly as more television content becomes viewable online. While only 2% of viewers watch television exclusively online at present, there is expected to be a significant increase over the next decade.

The corporation also faces criticisms for its perceived monopoly of the telecommunications industry. Many newspapers have criticised the perceived scope of the BBC website, which offers sections dedicated to areas as diverse as cooking, science and travel. This means that it is more difficult for other organisations to reach a wider audience so easily. Similarly the news website, which remains free to view, is disliked by newspapers, who have recently introduced online subscription fees in order to offset revenue losses from lower print circulation. In an attempt to address some concerns of its monopoly in the television sector, the BBC has forced some channels to move to an online platform. Most notably BBC Three, which specializes in comedy, will only be viewable on iPlayer by late 2015. This has partly been justified as increasing competition between the BBC and other channels such as ITV and Channel 4. Similarly executives are also understood to be exploring the possibility of the BBC News Channel transferring to an online-only platform. This would have the additional benefit of helping the corporation to achieve its long-term goal of reducing production costs.

In a further sign that the BBC may be starting to reform, on Sunday the BBC announced it had reached an agreement with the government whereby the license fee will rise in line with inflation. A license will also be required by people who watch online catch-up services such as iPlayer and ITV Player, where before a license had only been required to watch live television. This is being used to offset the increase in costs incurred by paying for over-75s to have free TV licenses, which the BBC will be expected to fully subsidies by 2021. This alone is expected to cost the organisation £650m, equivalent to one-fifth of its total budget.

However, if TV licensing revenue continues to fall short of expectations, the corporation may face pressure to also adopt more advertising. BBC World Service already uses limited advertising, with adverts for tourism in areas such as Azerbaijan and luxury watch brands showing between programs. Likewise advertising space is available on the World Service website, with the revenue generated contributing towards the service’s £245m budget. While advertising is unlikely to be included in the agreement which renews the BBC charter in 2017, there can be no doubt that the corporation faces significant challenges as it adapts to technological changes and ensures its long-term financial stability. With Tony Hall saying that the license fee only has ‘10 years left of life’ the organisation will need to consider new revenue sources. There is also likely to be sustained political pressure, both from a Conservative government that feels aggrieved by the corporation’s 2015 election coverage, and from national newspapers that believe the BBC prevents them from increasing their online readership. This will add to the scrutiny on how the corporation functions, and makes criticisms such as those demonstrated in the recent debate on the Tunisia attacks more likely.

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