21 February 2020

financing the BBC

The UK's TV tax — now also applied to watching television output on other devices — makes little sense in the digital age. Should we therefore rush to abolish it? Not necessarily, but it does mean we should be thinking about switching to a new system in the not-too-distant future.
   A key question, obviously, is whether there should be state subsidy of public broadcasting at all. Even in the digital age, a few areas of media market failure remain (e.g. radio, because of the free rider issue) so there is certainly an argument for limited subsidy. The larger question of whether, beyond this, BBC output — or indeed culture in general — should be subsidised by the state is a more complex one.
   Let's assume subsidy of BBC output continues to be appropriate, given that a large number of UK voters seem to endorse this. The efficient way to achieve this is no longer via licensing. Ultimately, once online modes of viewing have become dominant, a scheme of the following type may be appropriate:
• charge for some parts of BBC output delivered online, in ways analogous to those already used by Amazon, Netflix et al.;
• leave other parts of online output available for free (including perhaps some of the things BBC Chairman David Clementi recently referred to as "bringing the country together": e.g. Strictly Come Dancing finals, Christmas specials, war anniversaries, Royal jubilees);
• give up charging for terrestrially broadcast output, which could be restricted to lower image quality;
• agree a top-up subsidy with the government.