BBC funding and the issue of financing trustworthy media
How will quality news media be financed in the future? Readers are tired of the intrusive ads and the social media platforms have anyway attracted almost all advertising budgets; paywalls and subscription fatigue are creating a small ‘elite’ that has paid access to quality content, which the media cannot afford to put out there for free; state-owned media and state subsidies are criticized.
While the discussion is widely ongoing in several democratic countries regarding the crucial role of public media, a landmark public media organization, BBC, is under scrutiny for their funding: the British government has put pressure on the discussion by announcing that the license fee – GBP 159 per household – people pay for the public service broadcaster BBC will vanish in 2027. Negotiations will start shortly about a new BBC funding charter from 2028.
The opposition talks about “cultural vandalism” and private media have already added a discussion about how big should public service media be allowed to be saying BBC is damaging the market for commercially funded media. BBC CEO said that a BBC funded purely by commercial means would fail to serve a universal British audience in the way it does now.
Liberal Democrat leader, Ed Davey, hinted that there is a link to bad publicity for the government saying: “Slashing the funding of a beloved national treasure just because you don’t like the headlines on the 6 o’clock news is no way for a responsible government in a democracy to behave”.
Critics have said the BBC is politically biased and London-centric. However, BBC’s news bulletins recorded some of the highest viewing figures for 20 years during the pandemic
Minister for culture, Nadine Dorries, told parliament that the BBC could not receive more money at a time when households were being hit by rising taxes and energy bills.
The Public Accounts Committee of the House of Commons has earlier expressed deep concerns about BBC’s financial prospects and planning, as each year people spend less time watching BBC TV and more households are turning to online platforms like Netflix.
The present BBC license fee will be frozen for two years and after that, BBC will for four years be compensated for inflation, the government said when announcing discussions about financing of the public service company from 2028.
BBC Director General Tim Davie told BBC Radio that society would lose something precious if it pursued a commercial model.
“It serves the British public and all the British public,” he said. “The principle of universality is absolutely the debate here. People say ‘can this be a commercial operation?’ Of course it can be a commercial operation, but it will not do what it does today.”
Alternatives mentioned:
- Levy on broadband connection as a more modern alternative to license fee paid by citizens. Those against say it could make broadband connection too expensive and limited the number of households able to pay for fast internet.
- Direct financing via the government budget – a solution used in other countries that do not have a license fee for the public service broadcaster. Critics say it would make the broadcaster too dependent of the government.
- Special income tax going to a fund for financing public service media. Used in some countries but critics say adding new taxes is not a very good idea.
- Advertising also in the UK as BBC already has ads for international audiences. Public service broadcasters in other countries broadcasters have ads. Critics warn that this could be overestimating what you can finance with ads and sponsorships. Competition for ads is tough and the market is dominated by ad giants.
- Subscriptions like competing commercial broadcasters. During the pandemic video streaming companies and quality news media have been successful selling subscriptions. Critics warn there is already a subscription fatigue and with subscription financing, you run the risk of a less inclusive society. The well-off can pay but the less well-off will be cut off also from quality media.
- Shrink the public service media. Keep a small public service company and let commercial media fight about the rest of the market. Media companies that see the BBC as a state-financed competitor would probably agree. Critics say it would be a mistake to give commercial powers more space.
At the same time as the government announced the negotiations about future financing of the BBC, national and regional newspaper publishers’ News Media Association accused the BBC of seeking to monopolise UK news.
NMA chief executive Owen Meredith in an open letter wrote that “the BBC is directly threatening the sustainability of independent local journalism with plans to be ever more local”.
He wrote that while the BBC has an “understandable desire to fulfill its purpose” of providing impartial news to the public, this should focus as stated in its Charter on “content not widely available from other United Kingdom news providers”.
The upcoming discussion will be about media quality and the inclusive society with warnings about producing quality media only for those who can and are willing to pay for it.
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