I was chatting to a friend the other day about the BBC license fee and how in this day and age it’s a ridiculous concept, paying a license to own a TV, what even is a TV these days, just bonkers – yet it’s the only thing that really works for BBC funding. Working from the assumption that the BBC retains it’s current level of funding – how else can you reach that target?
We had a few ideas about how it might be achieved, general taxation is perhaps the most obvious, like in Australia and other places. A tax on data consumption through your broadband and mobile contract perhaps. All these have their pros and cons. So I chatted them through with my dear friend, Chat GPT, going through the various options and in the end decided the most workable was a Hybrid Model, combining:
- General taxation for core public services (fair and stable funding).
- Subscription model for premium content (choice and flexibility).
- Tech tax on digital platforms (ensures they contribute).
From here on in these are Chat GPT’s words…
Here’s how the Hybrid Model could be balanced, with percentage contributions from each component to successfully replace the £3.8 billion the BBC currently receives from the license fee:
1. General Taxation (50% = £1.9 billion)
Fund core public services, such as:
- News and current affairs (especially impartial reporting and emergency broadcasting).
- Educational programming (like BBC Bitesize).
- Radio services (e.g., Radio 4, Radio 1, local radio).
- Coverage of cultural and national events (e.g., Royal events, sporting events).
Why 50%?
- Public service elements benefit everyone, so taxation ensures equitable funding.
- A stable, predictable source of income that supports the BBC’s public mission.
- Minimizes the financial burden on households while preserving accessibility.
Impact on taxpayers:
- Spread across
32 million taxpayers, this equates to **£60 per year per taxpayer** (or ~£5/month), a modest amount compared to the current license fee.
2. Subscription Fees (35% = £1.33 billion)
Fund premium content, such as:
- High-end dramas (e.g., Sherlock, His Dark Materials).
- Big entertainment shows (e.g., Strictly Come Dancing).
- Exclusive documentaries and nature series (Blue Planet, Frozen Planet).
Why 35%?
- Encourages consumer choice: Only those who want premium BBC content pay for it.
- Reflects modern viewing habits where people are accustomed to paying for on-demand services like Netflix.
- Reduces the funding burden on taxpayers.
Cost to subscribers:
- A subscription fee of ~£6/month (half the cost of Netflix’s Standard plan) for ~18.5 million households (estimated 75% take-up) would generate the required revenue.
3. Tech/Streaming Tax (15% = £570 million)
Impose a small tax on digital platforms that benefit from the UK audience and media ecosystem:
- Streaming platforms (e.g., Netflix, Disney+, Amazon Prime).
- Social media companies (e.g., Meta, YouTube).
- Cloud and digital service providers (e.g., AWS, Google Cloud).
Why 15%?
- Targets companies generating billions from UK users but paying relatively little tax locally.
- Aligns with public sentiment that tech giants should contribute more to society.
- Offers a flexible and growing revenue stream as the digital economy expands.
How it works:
- A ~2% tax on UK revenues from tech/streaming companies (~£28 billion combined) could raise ~£570 million annually.
Breakdown of Contributions
| Component | Percentage | Revenue (£) | How It’s Funded |
|---|---|---|---|
| General Taxation | 50% | £1.9 billion | Small addition to income/council tax |
| Subscription Fees | 35% | £1.33 billion | £6/month from ~18.5 million households |
| Tech/Streaming Tax | 15% | £570 million | ~2% tax on UK revenue of tech/streaming giants |
Why This Mix Works
- Fairness: Spreads the cost across taxpayers, consumers, and corporations.
- Sustainability: Reduces reliance on any one revenue source, making the BBC more financially resilient.
- Choice: Allows households to decide whether they want premium content.
- Alignment with Trends: Reflects how media is consumed today, balancing public funding and user-driven models.
This structure would ensure the BBC continues to provide world-class content while staying relevant and financially viable.