The BBC is almost 100 years old. Will it survive in the next decade?

The British Broadcasting Corporation is facing unprecedented political hostility, looming threats to its funding, profound cuts to some services and ever-increasing competition from digital platforms ahead of its centennial in 2022.

BBC President David Clementi said Wednesday that while he welcomes a debate about his future funding, the programming of the people they love and rely on is at stake.

“The BBC is a great national resource; a smaller BBC is a weakened UK,” he said during a speech at the BBC offices near Manchester.

A fight for funding

Review of the canon comes after a sensational election campaign in which both major political parties have criticized BBC journalism, and in between an acid relationship between Prime Minister Johnson and the media in general. Building up the pressure: starting this year, the BBC will have to cover the estimated £ 250 million ($ 324 million) cost of free TV licenses for some people over the age of 75.
And just as its future funding is being questioned, the BBC is facing an ever greater challenge from huge global digital rivals like Netflix (NFLX), Amazon (AMZN) and owned by Google Youtube (GOOGL), eating away to its audience.

“There is currently a more existential risk to the BBC than it has been in a long time,” Claire Enders, founder of the research firm Enders Analysis, told CNN Business. “This will be a fight with weapons.”

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The BBC gets at least 75% of its budget from the £ 3.69 billion ($ 4.78 billion) it receives from the license fee. The rest come from BBC licensing agreements and commercial sales outside the UK.

Every UK family watching live broadcasts on any platform is required to pay £ 154.50 ($ 206) every year. Although tens of thousands of people are prosecuted each year for not paying, only five people went to jail in 2018 for not paying the tax and resulting fines, according to the BBC.

By announcing the tax investigation earlier this month last week, the UK government said that the broadcasting landscape has changed significantly and warned the BBC to face the fate of the video rental store’s bankruptcy. Blockbuster, which failed to detect the threat posed by Netflix.

“More and more children recognize Netflix and YouTube names than the BBC does – this should open the eyes of the BBC,” said Nicky Morgan, a former secretary of state for digital, culture, media and sports recently. “Quite simply, the world in which the BBC was created, and the license fee was established, has changed beyond recognition.”

The BBC started in 1922 as a radio service and started uploading to Television license in 1946, when television programming was reintroduced following its suspension during the Second World War. Including its famous World Service radio show, active since 1932, BBC content reaches 426 million people worldwide every week. Its website is one of the best digital news points in the world. (CNN competes directly with the BBC in the news.)

The BBC spoke openly about the possible modification of its financing, stating that the tariff is the best way to guarantee an independent universal broadcaster. A BBC spokesman indicated a review commissioned by the government in 2015 that found that the current system is the most fair and effective.

“The BBC is the most widely used media organization in the UK. It reaches the most people. It is used most of the time. One would not think that from some of the things said.” the spokesman told CNN Business.

“If we want a strong BBC that promotes the UK overseas, brings the nation together, promotes the success of the creative economy and heavily invests in British talent, people need to explain how other models would offer it better than the canon.”

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Regardless of resistance, changes are inevitable.

The first could come in 2022 – on the 100th anniversary of the founding of the BBC – when the government could decriminalize the failure to pay the license fee, turning it into a civil offense. But some media experts and the BBC say that this would lead to even greater evasion and the loss of hundreds of millions of pounds of revenue.

An even greater interruption could occur in 2027 when the BBC’s Royal Charter – the contract with the government that determines how it is financed and managed – is awaiting renewal. That will be the first year that the license fee could be completely eliminated, a government option ministers said they must keep open.

Lord Michael Grade, who was chairman of the BBC’s board of governors from 2004 to 2006 and then president and CEO of commercial rival ITV from 2007 to 2009, said CNN’s decriminalization of the license fee would be welcome, “but it’s not just practical.”

Alternatives could include introducing a tiered license fee based on household income or offering BBC services such as podcasts and additional subscription channels. Or the cost of the license may be reduced.

But Richard Broughton, research director of Ampere Analysis, said that such models would lead to a very different BBC – one that has less programming, less investment in the creative sector and less local content.

Regardless of what happens with the license fee, “we are inevitably heading towards a reduced BBC,” he said, as he is already facing budget cuts because the license fee is not rising in line with inflation. In 2016, the company announced the need to save £ 800 million ($ 1.03 billion) by 2022, and this recently announced 450 layoffs iin its news division as part of this effort.

“Even in current trends if we adjust the BBC’s inflation revenue, it has already experienced a 15% reduction in real funding over the past 4 years,” said Broughton, due to agreements with the government to freeze or slow down increases in license fees.

Less money, less content

The cuts to the BBC will not just remove pieces from its own production, but will hamper one of the biggest drivers in an important economic sector, experts warn.

The BBC is one of the world’s largest content commissioners and a major global launching platform for seminal shows and creators from Dr. Who at Phoebe Waller-Bridge.

Second government data, the film, television and music sector contributed £ 21.3 billion ($ 27.6 billion) to the UK economy in 2018, while the overall creative services industries brought in £ 111 billion ($ 143 billion). This is not far behind financial services, which contributed £ 132 billion ($ 171 billion) to the UK economy in 2018.
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“Playing with funding would have many implications for the rest of the UK economy,” said Broughton.

Furthermore, said Lord Grade, the BBC cannot – and should not – attempt to do so compete with digital giants like Netflix. If they do, he said, British citizens will lose access to programming made especially for them.

“You can’t pretend that they will make the same editorial judgment they do now,” he said. “There is a direct link between your funding source and what goes on the screen or radio.”

In addition to commercial pressure, diplomacy is also at stake, said Lord Grade, stressing that the BBC’s global reach in entertainment and news is an important aspect of British “soft power” in the world.

The debate on the future of the BBC is not just taking place in the context of a rapidly changing media environment. The political nuances of government review are hard to miss.

During the election campaign, Johnson rattled off one of the BBC’s best anchors for a traditional interview. The report tightened further after the BBC decided not to broadcast a prime ministerial speech about Brexit because the government insisted on distributing videos rather than allowing Downing Street TV stations to film.

Government ministers are reported boycott the BBC’s early morning radio news program about its alleged bias. And the BBC political editor was part of a group of journalists who came out of a Downing Street briefing when some journalists were blocked from participating.
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The government denies that the threat of the license fee is “political reimbursement”. Morgan, who was replaced as a culture secretary last week in a government reshuffle, said she “completely refuses” the suggestion. But the former BBC Grade president is warning the government to proceed very carefully.

“The public will not forgive any government that interferes with BBC independence,” he said. “The BBC belongs to the people.”

The questions are multiplying whether the BBC really needs so many TV and radio channels, whether it should be the first home of entertainment shows and whether its most recent dip in podcasts it’s worth it.

“The big question is what we want if anything from public service broadcasts for the next 20 years,” said Lord Grade.

No other public broadcaster in the world covers as much ground as the BBC, from popular television and entertainment radio to concrete documentaries with conservationist David Attenborough and one of the most popular news organizations powered by thousands of journalists around the world.

“The BBC will survive this … but what the BBC will survive this, I’m not sure,” said Enders.


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