Could the BBC be bigger than Netflix?

11 January 2020

An interesting development that came out of the general election in December last year was the opinion from both the Conservatives and Labour that the BBC was biased.

One could argue that if both sides of the fence are unhappy then the BBC managed to balance their reporting on the general election.

Growing up, my view on the BBC was always one of love and pride as I enjoyed the programming and basked in the glory that, unlike our European or American friends, there were no adverts. Much like ‘The World’s Favourite Airline’ it pushed British culture and soft power around the world. No mean feat for a small island nation.

However, with the rise of the streaming giants, where users can pay monthly to access a huge amount of content, the BBC looks increasingly archaic in the way it creates and distributes content.

Suddenly a publicly funded entity with over £5 bn in revenues, with 75% collected (with threat of a custodial sentence for non-payment) from the UK taxpayers, looks like an institution of a bygone era. The BBC is being deserted in droves by the crucial 16-25 year old audience, over half of whom say they never watch or consume any other BBC content. The decision to stop transmitting the BBC’s youth channel, BBC Three, in favour of keeping Four (for more mature audiences) live, has further compounded the issue.

With the cost of the licence fee now £147 a year – and continuing to rise with inflation – this is becoming for some homes an unnecessary burden that can’t be justified, especially if you are also paying for access to one of the other streaming services. This is only going to get worse in June when the over 75s suddenly have to start paying for their licence, which previously has been covered by government, meaning a further £600M will need to be collected. Calls by the government to decriminalise the non-payment of the licence will surely put pressure on the need to reform the royal charter which expires at the end of 2027.

But what should be done? Firstly, we need to look at the market economics and the many businesses investing and thriving in a new breed of subscription-based content. Television, ironically, has never been so popular and the business that should have benefited the most from this renaissance is the BBC. However, due to the rules around the licence fee, the BBC cannot liberate business model in the way it needs to in order to be able to play in this market effectively. I am in no doubt that if iPlayer became a global service, that anyone could subscribe to, it would quickly dominate global audiences. Add to that the vast collection of content the BBC has created and distributed over the past 100 years, and it gives their offering enormous appeal.

By opening up the subscription model globally, it could make the reduction or termination of the licence fee in the UK a reality. It would also give the BBC the ability to consolidate all of their activities from BBC Worldwide (such as BBC Persia to BBC America) which even today generates a healthy income.

Much like other industries that have shed their state supported monopolies over the past few decades, the BBC needs to wake up and smell the coffee. No longer do we have a transmission network but an IP infrastructure that knows no territorial bounds. Coupled with the rise of smartphone and tablet technology, then you’ve effectively put a television into the hands of two thirds of the world. These two technological trends provide a massive opportunity for the BBC.

As Silicon Valley has realised, people will pay for good content and like subscription models. It is time the BBC is released from the shackles of a dated funding model and allowed to spread its wings. Certainly, at the very least, it would give it the independence to be biased in future reporting should it choose to be so!