Allowing the BBC to carry advertising won’t work, according to the House of Lords Communications and Digital Committee.
In a report looking at future funding options for the BBC, the Committee found adverts on the BBC “would provide insufficient income while decimating the revenues of other public service broadcasters”, such as ITV, Channel 4 and Channel 5. That’s because the overall pot of income from advertising wouldn’t increase, but be spread across more broadcasters.
But the Committee did find three alternatives to the current model
- A universal household levy, linked to council tax, which could take “greater account of people’s ability to pay”.
- A ring-fenced income tax
- Reforming the existing licence fee system to provide discounts for low-income households.
The Committee also found that a subscription model, like advertising, would deliver insufficient revenue. It comes at a time when existing streaming services are beginning to struggle and develop cheaper or free ad-based services.
Technical hurdles to a paywall
The committee heard that it is “not technically feasible to develop conditional access technology for analogue radio” (e.g. FM). It did however hear that may be possible for DAB, through it was told this would mean every DAB set would need to be replaced, including car radios.
For TV services, the Committee heard evidence that a full paywall would not be feasible until a ‘second digital switchover’ to online TV – something that could only happen from the early 2030s. There is however a campaign to ‘save Freeview’ beyond 2030. Current connectivity would however support a hybrid online subscription model. The Committee commented that the feasibility of the model will be “determined primarily by decisions about the BBC’s purpose and commercial viability, not technological factors.”
The House of Lords report urged the BBC to move away from a funding model linked to the existence of televisions in a home. It warned the BBC faces a challenge from viewers who don’t feel represented by the broadcaster.
As a result, it called for the BBC to “publish a bold new vision”. The Committee added: “This must propose a strategic purpose that will guide it [the BBC] through the next quarter of the 21st century and set out what it will do differently, what it will stop doing and where it needs to innovate.”
The Lords Committee also expressed concern at the lack of plans by Government for public engagement on the process. It called for the Department for Digital, Culture, Media and Sport (DCMS) to “consult the public extensively” first. It also said any discussion should not revolve around a binary ‘for or against’ debate.
Aidan Smith, editor, RXTV