Another half a million people opted not to renew their Licence Fee last year according to the BBC’s latest Annual Report.
The document reveals that the number paying the £180 fee fell by 539,000 in the past year to 23.3 million. Five years ago that number stood at 25.3m.
Despite the decrease, a hike in the level of the fee means the BBC’s annual LF revenue still grew by £36 million and now stands at £3.9 billion.
This is around double the revenue generated by ITV’s channel business (£1.9bn), almost four times larger than the Channel 4 group’s entire revenue (£1.03bn) and dwarfs the revenue enjoyed by STV and S4C.
The Licence Fee income is also supplemented by almost £200m in dividends from BBC Studios, its global commercial arm which produces content for broadcasters and streamers around the world, owns the BritBox streaming service and multiple overseas channels and, in the UK, the commercial broadcaster UKTV.
Despite this, the BBC argues it is insufficiently funded.
Who has to pay the BBC Licence Fee?
Even though the proceeds go almost entirely towards funding the BBC, payment of the £180 annual fee is mandatory for any household which watches live content from any broadcaster or streaming service.
Viewers who don’t watch BBC iPlayer and who also don’t watch any live content may not need to pay the Licence Fee.
Unlike the subscription fees levied by streaming services, it’s not possible to sign up to the TV Licence on an ad-hoc basis whenever a favourite show or major sporting event returns.
Instead viewers must sign up for annual licence and then apply to cancel if they no longer watch content covered by the fee.
Options for future BBC funding
While managers complain loudly about falling numbers of payers and the resulting need to take “tough” decisions in an era of reduced budgets, they have so far refused to follow the example set by all other paid-for streaming apps and restrict use of iPlayer to those who hold a valid licence.
The corporation also continues to argue against any introduction of advertising on its services, even though UKTV is one of the UK’s biggest and most profitable portfolios of commercial channels and its international news channel is funded by adverts.
Instead senior figures, including BBC Director General Matt Brittin and Chair Samir Shah, have been pushing hard for ministers to impose an inescapable levy on all households, regardless of whether they use BBC services.
The Government is currently considering options for funding the BBC over the next decade as part of the ongoing review of its Royal Charter.
Recently the BBC has taken to citing research it commissioned and paid for which claims that “94% of adults use BBC services per month” but that “fewer than 80% of households pay the licence fee”.
However under current rules, use of the BBC website, its radio stations and its BBC Sounds, Sports and Weather app are all permitted without paying the fee and the BBC has yet to argue for placing any of those services behind the Licence Fee paywall.