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 while new Director General Matt Brittin claims the broadcaster is facing a “moment of real jeopardy”.
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 the international feed of the news channel is funded by adverts.
Instead senior figures, including Matt Brittin and BBC 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.
Shah said the annual report “sets out in detail the considerable pressures now faced by the BBC – not least the question of future funding.“
He added: “We have to remember that the BBC is, and always has been, so much more than simply a broadcaster. It is a fundamental public good. It delivers unique benefits to audiences and to the whole of the UK – for our society, our economy, and our democracy.”
Need to tackle Licence Fee evasion
In response to today’s figures, the chair of Parliament’s powerful Public Accounts Committee said it was now time for the BBC to heed the calls of his committee on the matter of Licence Fee evasion.
Sir Geoffrey Clifton-Brown commented: “The BBC continues to face a steady decline in licence fee sales.
“It is still struggling to attract younger audiences, who increasingly favour subscription services and video-sharing platforms over traditional broadcast content.
“The Committee has previously criticised the BBC’s licence fee enforcement and called for a clear evasion target, a recommendation the BBC declined to adopt. This issue remains acute, with an estimated £525 million lost this year to evasion.“