BBC to look at overhauling licence fee as 300,000 more households stop paying
As the broadcaster continues to battle the rise of YouTube and streaming services that have split audiences across numerous platforms, its annual report revealed 23.8m licences were in force at the end of the year, down from 24.1m in 2023-24. The drop means a loss of about £50m in revenue for the corporation.
It comes with the government and BBC bosses starting discussion of the future of the BBC and its funding as part of the process to renew its charter. Both sides have suggested changes to the licence fee.
However, BBC senior executives have set red lines around any move to a subscription or ad-based service as used by their streaming competitors.
The pace of change within the media world is so great that Samir Shah, the BBC chair, said in the report it was a 'moment of real jeopardy for the sector'.
'The fight is on, and it is vital we now think very carefully about the kind of media environment we want for the UK,' he said, adding he was searching for 'the best future funding model for the BBC'.
'I have already set out some views on this and the board will be saying more over the coming months,' he said. 'But all of us are clear that we want to make sure we protect the BBC as a universal service and help it not just to survive, but thrive, for a generation and more.'
Licence fee income increased slightly year on year, totalling £3.8bn in 2024-25. However, the small rise was down to the 6.7% inflationary increase in the fee to £169.50 a year.
'The current collection method remains fair, effective, and good value for money,' the report said. 'As we approach the end of the charter, we will proactively research how we might reform the licence fee to secure the benefits of a well-resourced, universal BBC of scale for the long term.'
The BBC annual report also showed that, for the last time, the former Match of the Day presenter Gary Lineker remained the highest-paid BBC star last year before he left the corporation in May. His earnings were about £1.3m. The next highest paid was Zoe Ball, with earnings of just over £500,000 last year.
After scandals including the departure of the disgraced presenter Huw Edwards, Shah said much work had been done to improve the culture in the BBC. 'Our staff are dedicated, hard-working and treat each other with respect,' he said. 'However, there are pockets in the organisation where this is not the case. There are still places where powerful individuals – on and off-screen – can abuse that power to make life for their colleagues unbearable.'
Following the Guardian's disclosure that the BBC is considering a major outsourcing project involving the help of big tech, Tim Davie, the corporation's director general, said his plans would 'require the BBC to continue to deliver reform, and to accelerate the rapid organisational transformation that has been under way in recent years'.
'We have already used gen AI to increase the value we offer audiences with initiatives such as adding subtitles to programmes on BBC Sounds, translating content into different languages on BBC News, and creating live text pages for football matches,' he said.
He added that the BBC had maintained 'its near-universal reach in the face of fast-changing audience behaviours and the pressures of a highly competitive global media market'.
The BBC has been trying to boost its finances and its commercial arm recorded a record revenue of £2.16bn, driven by growth in the BritBox product that lets overseas customers watch BBC content. The licensing of the Bluey brand was also a money spinner.
Despite younger audiences moving away from traditional TV, the BBC argued it was performing strongly among them compared with other traditional channels. Among under-16s, it is only behind YouTube in terms of most-used UK media. It is level pegging with Netflix and ahead of Disney. Among 16- to 34-year-olds it is only behind YouTube and just ahead of Facebook and Instagram.
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