BBC is ‘clinging on to licence fee’ says Mark Littlewood

The head of the Institute for Economic Affairs blasted the BBC TV licence fee as he compared the broadcaster to other paid services such as Netflix, Amazon and Sky Sports. He argued the corporation was failing to move with the times as people become more and more accustomed to shopping around for their tv deals. The economist also said that failure to ditch the TV fee model left the BBC with a cap on how much revenue that could raise.

Mr Littlewood told TalkRADIO’s Kevin O’Sullivan: “I don’t know whether it is complacency but there is a certain entrenched conservativism.

“They are clinging onto the licence fee by their fingernails, they are determined to cling on for as long as they possibly can

“You know back in the day when the licence fee made a certain degree of sense because of the way television was broadcast was such that if you were streaming or broadcasting tv pictures into number five Acacia Avenue the people at number six Acacia Avenue could pick up the same pictures.

“We have now got to all sorts of kind of ways that we pipe pictures into people’s rooms, we have mentioned streaming services like Netflix, Amazon Prime, you can watch it whenever you like.”

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He continued: “Of course we have had satellite tv around for a while so I think now people are used to what kind of television pictures do I want to buy.

“Do I want to buy Sky Sports, do I want to by Amazon, do I want to buy Netflix and I really don’t see why the BBC should be treated any differently.

“I think they are doing themselves a disservice.

“If they cling onto the licence fee it puts a pretty clear ceiling on how much revenue they can claw in.” 

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It comes as National Audit Office (NAO) highlighted issues with the BBC’s financial model, as it suffers from falling audience levels.

The NAO’s report found the BBC has been “slow to change” and warns the corporation is at financial risk if it doesn’t adapt to changing viewer behaviours.

The report read: “While the BBC remains the most used media brand in the UK, its share of younger audiences has been under pressure.

“Falling audience share poses a financial risk as people are less likely to pay the licence fee if they do not view licensable content.”

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The BBC’s licence fee income fell by £310million between 2017-18 and 2019-20, to £3.52billion.

A significant number of younger audiences have switched off from the BBC, with a 450,000 fall in the number of non-over-75 households buying TV licences.

The NAO said this was due to a change in audience viewing habits and more of these households qualifying for a free over-75 licence, as the decision to scrap free TV licences for pensioners only came into effect from August 2020.

The amount of time an adult spends watching the BBC has also dropped significantly.

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