How do you solve a problem like the licence fee?

This is a transcript of a speech I made today at the Salford International Media Festival, part of a discussion about the future of the BBC. It includes a suggestion that the licence fee should be reduced to £10 per annum.

On 15th October 1973, wearing a crisp white shirt newly ironed by my mother, I nervously pushed open the big brass doors into Broadcasting House and signed into reception to start my career as a BBC News Trainee. 

As we sat in our classroom on the second floor, our instructor greeted us with these words: 

“Congratulations!” he said. 

“You are the chosen ones. We expect all of you to rise through the ranks to become the next generation of BBC leaders. 

“Unless,” and here he glowered at us, “unless you commit one of two heinous crimes – bounce a cheque at BBC Cashiers, or forget to pay your licence fee”. 

There were six of us trainees in total, and later on in the first term our instructor made us take part in a competition – to find which of us was most likely to become Director General. The winner was Tony Hall.
 

40 years later, he made it. How ironic that one of his tasks might be to create a new BBC where no one will ever be penalized for not paying their licence fee. Because there won’t be one. Well I hope there won’t. 

For I believe that the licence fee is killing the BBC. A BBC I love, both as a producer, and as a viewer. This absurd sword of Damocles hanging over the Corporation every few years, the licence fee, has got to be cut down. Because going into 2015, I can’t think of one good reason to keep it. 

In 1946 it was a great idea. In 2015, it’s anachronistic, unfair, expensive, regressive, and if the BBC fights to keep it beyond 2016, as they probably will, and if they win that fight, as they may, then the television licence will bring down our BBC. As people refuse to buy it, and find they are no longer threatened with jail for doing so, and successive governments find ways of letting people pay less for it, so the BBC will be starved of revenue and wither on the vine – and all for a misguided belief that the licence fee is a good thing. Well it might have been once, but now it isn’t. 

‘But £145.50 a year is such good value,’ they say. To which I might reply: if it’s such amazing value, then we shouldn’t be scared of getting rid of it. 

£145 a year is only very good value for Gillian Reynolds, and for me, and for people in the room who like Radio 4 and Radio 3, and who watch BBC2 and BBC4. Middle class programmes commissioned for Middle England, paid for by the whole. The BBC is very, very good value for us. But it’s incredibly poor value for those who only want to watch Doctor Who, Eastenders, Strictly Come Dancing and Match Of The Day, and switch to ITV the rest of the time. Which is most of the country. 

Imagine the Royal Opera House offered a £145 season ticket that covered every performance in a year. There’d be a stampede at the box office from opera buffs. But this would scarcely pay for the wardrobe department. So imagine instead, they made everyone in London buy the season ticket, whether they liked opera or not. There’d be riots in Covent Garden. 

My son is 32 and, like all his friends, doesn’t see the point of owning a television. Neither do any of my other elder children, who range from 16 to 30. My mother is 94, and she constantly complains that there’s nothing on. There are whole swathes of the North East where Strictly is the only BBC programme ever watched. There are hundreds of thousands of students who really resent paying £145.50 just to watch Countdown. 

Let’s be clear what this licence fee actually is – it’s a tax on the poor majority to pay for the viewing habits of the richer minority. Let’s admit it, and then let’s abolish it, and move on to find a new way of funding the BBC we all love. 

Now the last time I debated the BBC, here at Salford, three years ago, I said a few mildly outrageous things, which isn’t like me. I said the BBC should axe one of its terrestrial channels, and I said that it should move all its daytime programming onto BBC1, and that it should shunt all the children’s programming off to cable to make way for it. I also said that BBC3 should move to Salford. 3 out of 4 wasn’t bad going. 

All of that seemed blindingly obvious back then. What I’m proposing now is even more obvious. 

But I’m going to be less outrageous this time: I’m not going to say ‘Axe the licence fee’. I’m going to say: let’s keep it, but reduce it to just £10, for every household in the land. 

Only a tenner a year. £135.50 less than the present licence fee, a 93% reduction. Now that’s a bargain. 

We’d collect the tenners either centrally, through taxation, or through council tax, like the police or the dustbins, so its collection wouldn’t cost a penny. I’ll come back to how we spend it in a moment. 

First, let’s examine of the notion that the entire BBC should be funded by one revenue source. It makes no sense. Because there are bits that need funding, and other bits that can fund themselves. 

When we consider the future of the BBC’s funding, we seem to forget that we’re talking about a powerful, valuable brand, a household institution for 70 years. It’s a strong, commercial marque, or it should be. And as such, it should be able to drive a reasonable volume of highly profitable, popular branded television on its own, without any subsidy. Let’s call it BBC1. And let’s look at how we could possibly find, say, £1.3bn a year to fund it. 

The BBC1 I’m talking about wouldn’t be a linear terrestrial channel. We’re in a digital world, and a non-linear one too. So it wouldn’t be one channel, but a whole collection of massively popular branded output – BBC Drama, BBC Comedy, BBC Wildlife, and so on. That’s what I mean by BBC One – it’s the BBC that most people watch most. 

We should offer BBC1, a package of great popular content, to all viewers, free of charge. And then let’s offer them some really exciting bonuses. Here’s how it might work. 

I pay £7 a month for Netflix in HD. The sole reason is, my wife and I love House of Cards. That’s £84 a year we happily pay for one brilliant television series. There’s lots of other stuff on Netflix, of course, but during House of Cards season – which lasts for a couple of weeks in the Spring, we watch nothing else. And, more importantly, it’s the only thing we pay for. 

We have the same addiction to Downton Abbey. If ITV offered Downton Abbey six months in advance on a subscription basis, we’d subscribe. If Sky took Modern Family off Sky One and stuck it on Sky Atlantic, we’d certainly ditch Virgin for Sky. That’s how digital works in the digital age: you pay for content, not for channels. It’s called putting the viewers in control. 

So the BBC should sort out its landmark, essential, must-see programmes – promote them to death and make them all available for download and streaming 6 months ahead of its regular transmission on the ordinary BBC One that everyone has free of charge. Let’s call this offering BBC One Platinum and let’s charge £14 a month for it – twice that of Netflix but with a much bigger, more attractive library. 

Yes, just £14 to be able to play one-upmanship with the neighbours over the next series of Doctor Who and Sherlock, or getting Match of the Day at 8 o’clock. If just 2 million people could be persuaded to subscribe, and I’m sure they would, that’s 30% of the current BBC One budget funded there and then. 

Then there’s sponsorship. What would a commercial organisation pay to associate its brand with Doctor Who? Or to affiliate its brand to an entire BBC genre, or a season, or an evening. If the BBC couldn’t raise £250m a year from sponsorship for its most popular products, they’d need a new sponsorship director. 

Then there’s Worldwide – what if it were a real commercial organisation, not an offshoot of BBC bureaucracy, could it not add the same again, considering the vast BBC library? We’re talking about a massive, robust, established brand here, big as Disney. 

And maybe, just maybe, there’s advertising. Advertising on the BBC? Why not? When it comes to big popular shows, there’s no correlation between editorial freedom and advertising. It’s just that Middle England thinks there is. They just don’t like the idea. It sounds dirty, like ITV. So, give Middle England the opportunity of opting out. Technology should equip our digital world with the ability to either play the programmes with ads inside, or pay a further £5 a month to have the programmes untarnished. BBC One Premium Plus. Spotify has taught us how to do it. 

If 1,000,000 people wanted their BBC One without the ads, that’s another £60million for BBC1. But most people wouldn’t mind watching the John Lewis commercial a few more times to save 93% of their licence fee, so the BBC could easily raise half a billion in ad revenue from BBC One, still a fraction of what ITV collects for the same output. 

By now, my new BBC One is so well funded, it could increase its programming budget by 10%. But we won’t let it. Instead it should pay for a new channel, BBC Risky, my new name for BBC Three, which should forget about youth, and instead focus on high-risk, cutting edge television. A properly funded risk-taking channel where ratings don’t matter, but creativity is king. You’d pay a separate subscription to watch – because all the best, edgy stuff will be on it. Just one cult hit, the next House of Cards, and it would make a huge profit. 

But what of the rest of the programmes, the real reason the licence fee is cherished, funding the cultural, educational programming, the public service broadcasting, most of BBC Two, some of the current BBC One, and all of BBC Four and Radio Four – the bits that less than 10% of the population consumes, but which 100% of us pay for? 

Let’s go back to that other great cultural institution, the Royal Opera House. We all pay for that, directly, through our taxes. Why? Because we think culture is important. Because it’s part of our national fabric. Because it matters. Because it’s excellent. That’s why we give it a subsidy of £28million a year, via The Arts Council. But that subsidy doesn’t come without conditions. 

It must raise other funding, from sponsorship and donations, commercial operations, touring, and it must reach out to the widest possible audience. This obligation generates an extra £44million a year, 1½ times the taxpayers’ subsidy. 

The Royal Opera House is a cultural institution with an educational remit and a commercial operation at its heart. It isn’t compromised or dirtied by the filthy lucre of sponsorship, or commercial operations, or the dead hand of educational outreach. It’s actually enhanced by it. 

So why can’t the unpopular side of the BBC – let’s call it BBC2, and Radios 3 and 4, be similarly funded? They must be the only cultural institutions in the country to be financed by public subsidy alone. What a waste of potential third party revenue, and all because any potential revenue streams are banned by the rules of this wretched, restrictive licence fee. 

So let’s do a deal with the next government and offer them a totally new funding structure. As the quid pro quo for reducing the licence fee to £10, get the government to agree to give BBC2 a solid, secure foundation, a guaranteed £300million a year for the next 20 years, to run it and the other unpopular bits. That’s only 10 times times what we pay for the Royal Opera House, and yet BBC2 programmes can get over 2million viewers, one thousand times the audience. 

Now that’s value. Then give BBC management the target to raise 1½ times that much in sponsorship, overseas sales and so on. Which would give it an excess of £200 million over its current budget, more than enough to pay for Radios Three and Four. 

Job done? Almost. 

It leaves two things: the news, and children’s television. Remember the £10 licence fee? 

I actually think people would be happy to pay a tenner a year to fund BBC News, the place people go to in times of national crisis. It would be part of the cost of running the country, like The Queen, or having your bins emptied. 

With 26.5 million households in the UK, my tenner for the BBC fund would contribute £265million. Of that, £100million could go on the news, roughly what it costs now, and that would leave us with £165million. Which is, coincidentally, the exact cost of BBC children’s programmes. 

£10 for BBC News and Children’s, and we get all the rest of the big, loveable BBC for free? Surely we’d all buy that.