The license fee is archaic: It's time to privatise the BBC's commercial wing

Elliott Haworth
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Nope (Source: BBC)

I keep receiving this rather irritating message on the BBC iPlayer.

“You’ll soon need to sign in to watch,” it says. Followed by “it's quick and easy”.

“You won’t feel a thing,” is glaring in absentia.

Forcing taxpayers to make an account, essentially to prove they are paying for a TV license, is a rejection of the modern viewing habits of the subscription economy. The BBC Store, in which one can purchase box-sets, will close in November after less than two years, through failing to grasp this.

But here an opportunity is presented.

Today, Netflix, Amazon, iTunes and others dominate, offering quality-based consumer choice through monthly packages. It seems absurd the BBC wouldn’t follow suit, and export the iPlayer overseas.

The TV license is an archaic tax from the analogue era, and the BBC cannot compete with the programming of the digital giants, which risks its sinking into irrelevance.

For example, The Crown, just one of Netflix’s hugely successful programmes of recent, should, undoubtedly, have been a BBC production. But alas, an £100m budget is far out of reach for the state-funded broadcaster.

So here’s a hypothetical suggestion – one that is probably over-simplistic, but which would protect the sanctity of the advert-free BBC, while ensuring it can remain competitive in the future, leading to a gradual abolition the licence fee.

First, split the commercial wing away from the news, radio, and local programming, creating two separate yet complementary organisations.

The latter remains temporarily funded by a reduced license fee, while the commercial wing is privatised and floated on the LSE, to raise capital for new original programming of a Netflix standard, with the state retaining a majority stake.

With higher quality programming, roll out a subscription based iPlayer globally. One only has to scour American Netflix to observe the popularity of British television abroad. And that’s without considering the hundreds of thousands of hours of original programming in the archives.

Assuming it is popular, at say £4 a month, and the uptake is significant to compete with the giants, it should outpace the £3.7bn per year raised from the license fee by some distance.

When such a time occurs, and the private entity is profitable, dividends from the state’s share of stock can be used to fund the news, radio, and local programming, thus eradicating the need for a license fee. British television would pay for itself, still under majority state control, while offering consumer choice, without obligation.

Clearly, my simplistic solution, dreamed up while unable to sleep, is full of holes. But considering changing viewing habits, the subscription economy, and the BBC’s inability to fund quality programming, a free market solution is a step in the right direction.

Elliott Haworth is business features writer at City A.M.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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