The BBC has always been closely scrutinised but it’s now facing unprecedented pressure to change the way it operates.
Last week’s announcement of the closure of youth channel BBC Three, was just the start of the political horse trading and negotiating that will take place between now and the renewal of the BBC’s Royal Charter in 2015.
While its many defenders want to keep the Beeb as a vast, independent-minded broadcaster and web publisher, publicly-funded through the licence fee, there is political will to radically change it, cut its budget, make the UK’s media market more commercially competitive. Everyone seems to agree that the BBC can’t survive in its current form.
The corporation’s Royal Charter - which gives it special status as the national broadcaster (and its most significant digital publisher) as well as the small matter of £3.6 billion in funding - is up for renewal in 2017 and set to be an issue at next year’s general election.
So what’s in store for the world’s oldest and largest national broadcaster?
1. The BBC could have its budget cut and end up significantly smaller.
A consensus is emerging that the corporation is just too big.
This year so far, not one but three former BBC director generals told the House of Commons Select Committee’s long-running investigation into the future of the Beeb that the corporation must change the way it operates, chiefly surviving on less public cash. On newspaper comment pages they were joined by a parade of current and former executives and on-screen stars saying similar things.
Tory party chairman Grant Shapps has already signalled the BBC faces a big budget reduction if it doesn’t get its house in order (while also, in a possibly related move, taking the time to criticise BBC journalists for broadcasting stories unflattering to the government).
Speaking at the DCMS select committee, Michael Grade, who has been chairman of both BBC and ITV as well as CEO at Channel 4, said: “(The BBC) tries to do everything itself. It is now into property, the post-production business, it’s into everything and has become far too big in areas it doesn’t need to be in.
“We ask the director general to be a master of the digital universe, a master of property, of international exploitation and distribution, of studio management, production, creativity. I don’t know any business that is as diversified as the BBC.”
Grade suggested that outsourcing more of its content creation to independent, private businesses (it currently commissions at least 25% of shows to the private sector) was “the only way they are going to keep the licence fee within a number that is affordable and defensible.”
2. It may have to scrap other channels, including BBC Four and perhaps even radio stations such as Radio Three.
The BBC runs a lot of things that don’t attract many viewers or listeners. When the political debate heats up, these get harder to justify.
BBC TV director Danny Cohen says he can’t guarantee BBC Four’s survival, telling Five Live “we can’t keep offering the same with less money.”
Michael Grade suggested this week that BBC Two and arts-centered BBC Four should be merged, echoing similar arguments from former BBC editorial chief Roger Mosey and Question Time host David Dimbleby, who both argued that the Beeb has too many channels.
The Beeb is already committed to saving £100 million by 2016 and BBC 3’s closure gets the corporation closer to - but not quite at - that target.
What chance services such as BBC Alba, which is watched by around 600,000 Scots Gaelic speakers a week and costs around £15 million a year to run, can survive?
3. It could be forced to share the licence fee with Channel 4.
This sounds like a long shot, but Lord Grade is convinced it could work. Grade, who was CEO of Channel 4 from 1987 to 1997, said at the Select Committee this week that a higher proportion of the TV Licence Fee should be shared between the BBC and others.
“You can go one of two ways – you can relieve Channel 4 of its public-service organisations and let it float into the free market, or if you believe as I do that the BBC should have some public-service competition to fill the gap, then I think Channel 4 could come into play as a competitor to the BBC for the licence fee,” he said.
This would, in the eyes of the Beeb’s many critics, be a fairer way to distribute public money and end a near monopoly on licence fee funding. But who decides exactly whom gets what?
4. It could get rid of the licence fee entirely and bring in subscriptions.
Non-Britons are often shocked to learn that every household must - by law - pay a non-negotiable subscription of £145.50 to watch TV.
In two years’ time there is a chance this won’t be the case. There are growing calls for non-payment of the licence fee to be decriminalised or for the fee to be scrapped altogether.
Former BBC chairman Gavyn Davies told the select committee last month: “There’s no doubt the licence fee is a bad tax if you were designing a tax. It’s very unfair … But it has benefits for the public service broadcasting infrastructure - that’s an ecology we should bear in mind.”
A blue-sky-thinking internal BBC report written by assorted industry experts suggested a number of alternatives to the current compulsory £145.50-a-year TV licence fee, including:
— A kind of shareholder model where licence fee payers buy into the BBC - presumably for more then £145.50 a year.
— A simple rise in the licence fee from 2017 - which would be hugely unpopular in Westminster and among voters.
— An inflation-linked funding scheme with better use of commercial assets and perhaps more cross-industry collaboration.
The obvious alternative to the licence fee is a system of subscriptions, where people pay for different kinds of service, but BBC strategy chief and former Labour minister James Purnell says this would lead to the creation of “first and second” class services and cost about £500 million to implement.