The Defund The BBC campaign launched last month with the aim of decriminalising failure to pay the TV licence fee by the end of 2020 and reducing its remit to cover BBC content only, rather than all Live channels. The campaign has enabled a much-needed debate about the BBC's role in modern Britain and, should it succeed, we can expect to see a much more competitive radio and broadcasting industry.
The BBC has long relied on its vast network and resources to squash what would have otherwise been very competitive commercial ventures. If the scope of the TV licence fee were to be altered, or even scrapped entirely, the Corporation would be unable to maintain its current position of sectoral dominance. While commercial organisations generate income from advertising in order to cover their operational costs, the BBC's 10 TV channels, 10 national radio stations and 40 local radio stations are all funded by the licence fee. The size of the BBC becomes yet another disproportionate advantage given it is both the only advertiser on BBC channels and enjoys free cross-marketing privileges across its whole network.
As the regulatory and competition authority for the broadcasting industry, Ofcom must ensure there is effective competition in areas that the BBC operates. Likewise, when the BBC Charter comes up for its mid-term review in 2022, the government should conduct an assessment to determine the full impacts of the BBC on its industry competitors. Before the Corona Crisis, the sector was already facing a significant decline as consumers switch to streaming services and the BBC's monopoly is making this awful situation markedly worse. To offset these structural imbalances, the same restrictions should now be placed on BBC Radio as imposed on BBC magazines and its other outlets.
With the means of financing the BBC changed, it would be interesting to see how commercially viable some of its radio stations would be. As I pointed out in an earlier article for Free Market Conservatives, five stations are presently geared towards audiences already well catered for by other bodies, these are: BBC Radio 1, BBC Radio 2, BBC Radio 3, BBC Radio 5 Live and BBC Asian Network. Former Deputy Chief Executive of Radio Authority, David Vick, said this was because "the BBC's whole strategy was consistently to try to occupy the ground commercial stations were moving into." With guaranteed funds via the licence fee, the Corporation was able to use its position of strength to ensure new commercial organisations would be unable to succeed. The most such groups could ever be was second best.
As for BBC programmes, it would again be interesting to know if its top-rated shows like Killing Eve and I May Destroy You would have proven able to compete with Netflix's House of Cards or Apple TV's Defending Jacob without help from the licence fee and the BBC's free in-house marketing. Much of BBC iPlayer's traffic can be attributed to the fact people already have to pay £157.50 a year for it and, consequently, feel obligated to use it. This provides no meaningful indication of how popular the BBC and its programming actually are with everyday consumers. If anything, one would expect the overall quality of BBC programmes to improve should the Corporation be made to compete in the free market.
There is a further argument to be made that the licence fee is, at its core, a tax – and a deeply regressive one at that. It is often compared to the poll tax, despite being substantially worse because poll tax at least granted those on low incomes subsidies. The licence fee offers no such means-tested relief or assistance. In contemporary Britain, this model of funding is not only outdated, but totally unsustainable. As the BBC's own former Chief Political Correspondent, John Sergeant, argues "The case for the licence fee..has been steadily eroded by the arrival of a multitude of competitors. It's hard to see how the BBC can last in its present form for much longer."
If we want to see more competition in the radio and broadcasting industry in the future, it is vital we take the first steps to achieve this now. It is high time the BBC finds an alternative means to fund its activities, whether this be through welcoming external advertisers on its channels or creating a subscription-based service that allows people to pay only for the content they want, rather than fund 'services' they have no wish to see.
