The BBC saw the number of active TV licences fall to 22.8 million last year – down 303,000 on the previous year. That decline was smaller than the 500,000 drop the BBC reported in its 2023/24 annual report.
Despite the fall in the number paying, the broadcaster’s latest accounts shows that licence fee revenue rose £183 million during the 2024/25 financial year thanks to a rise in the annual charge. Total income from the fee was £3.84bn.
Even though the proceeds go almost entirely towards funding the BBC, payment of the £174.50 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.
Falling income from the annual fee is a major factor behind cuts to the BBC’s budgets and output. Even before the cuts, regular polling from YouGov suggested that two-thirds of the public believe the fee offers poor value for money.
Future funding arrangements will be a central part of the upcoming review of the BBC’s Charter which the Government has said will “consider funding options to support the national broadcaster’s long-term future”.
Ministers have already ruled out funding the broadcaster’s roughly £3.8bn budget from general taxation.
Senior BBC executives have suggested potential changes of their own, including moving away from the TV Licence model and funding the broadcaster through a levy collected as part of the Council Tax.
Such a move would make it impossible for those who don’t watch the BBC or any other content currently covered by the Licence Fee to avoid funding it.
In addition to its BBC branded channels, the broadcaster also operates one of the UK’s largest portfolio of commercial channels via its wholly owned UKTV subsidiary, home to channels such as U&Dave, U&Yesterday and the subscription comedy channel U&Gold.
Profits from these channels and the BBC’s wider commercial activities, including its global production business, merchandising and overseas channels and apps, also provide some funding for its core UK activities.