December 10, 2014
A recent Ofcom report states that there are almost a million households who have a broadband connection, but no TV. The implication is that these households are still viewing TV content, but online, perhaps through catch-up services via their mobile, tablet or laptop, rather than on a TV.
Is this a problem? Well, potentially yes, particularly if you are the BBC, and your revenue is dependent on the Television Licence Fee.
The trend in television viewing is undoubtedly for more and more content to be accessed online, through ‘on demand’ services, such as iPlayer, 4OD, ITV Player etc. Self scheduling is popular and convenient, even if it does begin to make the dark art of the television scheduler redundant.
The industry has seemed happy to satisfying this online revolution. New business models have emerged in the commercial sector, with advertising the norm. Innovations, such as the (slightly spooky) direct addressing of you by name, on 4OD, and being able to choose between a couple of different adverts, which have been chosen specially for you (by a computer), show how important this delivery platform is becoming.
But what of the BBC? The Corporation has been at the vanguard as far as technical innovation is concerned, with the iPlayer leading the field. BBC Three is set to become an online only channel, and Radio 1’s video content is moving from YouTube over to iPlayer – presumably to attract the elusive ‘young’ to the platform. More and more content will become available as online only, with Internet channels perhaps becoming the norm within a few short years.
This presents the BBC with a funding conundrum, raising more questions than answers. As an increasing number of households choose to ditch the TV, but continue to watch BBC content, for free, perfectly legally (as long as it isn’t live TV) via other devices, what is the future of the Licence Fee? How many households need to be lost before the Licence Fee is insufficient to fund the BBC’s operations? How many households need to be lost before the Licence Fee is moribund as the BBC’s funding model? Could iPlayer be transformed into a subscription service, or is the genie already out of the bottle, as viewers are habituated to BBC online content being free at the point of consumption?
It has all happened before of course. The BBC used to be funded by the Radio Licence Fee, until the upstart television stole away the listeners, and the funding model was transferred to the TV Licence Fee (which currently funds both TV and radio).
The Radio only Licence Fee was finally abolished in 1971, when it cost a princely £1.25! Are we now going to see the iPlayer subscription, or some other solution to fund the BBC? Charter Renewal in 2016 is certainly going to be interesting! One thing is for sure though, the days of the TV Licence Fee may well be numbered.
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