UK TV Broadcasting – Is the Licence Fee an Anachronism or an Essential ?

The short answer to this question is that, for the BBC at least, it’s both an anachronism and an essential….

The licence fee was originally introduced to fund public broadcasting way back in the 1940s after the enforced break in transmissions caused by WW2.

It worked reasonably well while the number of channels was small, TV broadcasting was still analogue and radio retained a significant audience share.While still reasonably priced it was probably a fair way of funding public broadcasting.

Since the dawn of digital TV in the early 2000s, with its plethora of new commercial channels, the BBC’s ‘market share’ of viewer attention has steadily dwindled, while the licence fee has risen nearly 20-fold from the princely sum of £10 p.a. for a colour licence in 1968 to the current £180 today.

Unsurprisingly perhaps, this has generated much argument as to why all of us should continue paying what is now a substantial amount for a service we may not actually use at all (the parallel with exorbitant Electricity and Gas standing charges here may not escape readers).

The recent scandals surrounding the BBC’s operation have added to the widely held perception that the BBC has been feather-bedded by the licence fee for far too long, giving it unfair advantage over commercial providers, and a tendency to ‘rest on its laurels’.  The hard fact the organisation now has to deal with is that its revenues are falling, as fewer and fewer people are actually paying the licence fee.

This is partly due to the fact that viewing live terrestrial TV broadcasts has become a ‘minority sport’ – more and more of us use on-demand services streamed via the internet, often via internet-connected ‘smart’ TVs or smart boxes. The majority of users also opt for subscription services from the likes of Netflix and Amazon Prime in addition to the free streamed catchup services offered by the major channels such as ITVX, All4 and My5. 

BBC’s iPlayer remains popular, but its market share is also on the decline. At present, apart from iPlayer itself, using on-demand services exclusively does not require a TV licence – more about this later. Provided you're happy to forego iPlayer and use on-demand exclusively, you can get plenty of video entertainment streamed to your TV quite legally without a TV licence.

In order to try to plug this developing funding gap, BBC has been campaigning for a change in the legislation, to bring all on-demand services into the licence ‘envelope’.

Is this justifiable ?

I would argue that it’s not…unfortunately for the BBC and its employees, the broadcasting world has changed beyond all recognition since the licence fee was introduced, with many already paying substantial monthly subscription charges on top of the annual £180 fee, while hardly ever using ‘live’ broadcasting or iPlayer. Small wonder then that so many are now opting out. Why, after all, should one company be allowed to retain an advantage over the competition....and do so by making all TV and video viewing illegal....with government connivance ?

Given the steady and pernicious increases in the cost of living we’re all experiencing, any attempt to amend the legislation would almost certainly force many people into civil disobedience. The licence fee has become increasingly unpopular in recent years, with the ‘last straw’ for many being the BBC’s withdrawal of the over 75s’ free licence concession. This highly unpopular action, taken by the organisation without any public consultation, was seen by many at the time as an unjustifiable attack on the elderly by the BBC, comparable with Starmer’s ‘theft’ of their Winter Fuel Payments in 2024. This, arguably, set the seal on his eventual downfall. Let’s hope, for his sake that Burnham has the sense to avoid this particular political ‘banana skin’….it's a significant one, and could well come back to haunt him in 2029 if he fails to see the danger  and goes ahead with TV licensing reform.

And of course there is the tricky question of enforcement of any new legislation.

Traditionally this has been the responsibility of the BBC, since it was transferred to them from the Post Office. BBC subcontracted the running of the scheme to Capita in 2002, who are still responsible for enforcement. A change in the legislation would increase the enforcement resource burden considerably, since Capita would need effectively to target the whole viewing public rather than those actually using ‘live’ services. This would no doubt result in extra contractors’ charges for the BBC, which might well exceed the additional licence fee revenue recovered, leaving them with a large funding 'black hole' (not a Tory one this time!) and much ill-will on the part of the viewing public. 

Detection would also be an issue - in days of old, when analogue broadcasts were received on style TV sets, it was possible to detect a TV in use from the street using the stray radiation emitted by the CRT tube. The old TV detector vans, and the maximum £1000 fine that could be levied, were used quite unashamedly to 'terrorise viewers into submission'.

Since the introduction of digital broadcasting, and LCD flat panel technology, however, stray radiation from electronic devices has been virtually eliminated, and not practically useful for on-site detection from the street. Thus the only practical way currently to detect unlicensed use nowadays is via some form of internet footprint e.g. use of BBC iPlayer via their online apps or use of live streaming services on one of the other commercial platforms which require an account sign-in. The fact that the licensing rules currently allow any device to be used for on-demand non-BBC content without a licence would make it even easier for the user to evade detection if the legislation changed.

Thus, at present, provided you’re prepared to rely exclusively on on-demand content, it’s perfectly legal to continue viewing using your digital TV without needing to fork out for a licence annually.

For anyone genuinely unable to afford the £180 each year, I’d recommend using GetiPlayer or yt-dlp to download any BBC content you really want to view as .mp4, which can then be accessed via any modern media player. A cheap second-hand streaming box (e.g. Roku, NOW TV) will provide a portal to the commercial on-demand services. A broadband connection is a must, of course, but these can be had for under £30/month, with most households now online anyway. One word of warning, though, - beware of using a 'Smart' TV set for 'illicit' viewing - these devices generate an internet footprint whenever connected, whether or not you're viewing 'live', which allows them to be detected even if not being used for iPlayer or any other signed-in app.

If the legislation is tightened up, this will alter the picture, significantly – to avoid detection via log-in details, many would probably resort to setting up false accounts; there would be more pressure on the hacking community to find ways round the measures used by the major streamers to restrict downloading of their content ‘off app’. I suspect this would happen quite quickly, and would force the authorities into using yet more resource to try to combat it (cf the ongoing battle waged by the publishers against the eBookshadow libraries).

What’s the Solution ?

A more lasting resolution to all this would be for the BBC and government to ‘bite the bullet’ and admit that the current funding model is no longer fit for purpose in the modern internet age (cf publishing industry and NHS healthcare, both of which have the same urgent need to adapt, but seem determined not to).

A more sensible way to fund public broadcasting generally would be to include some limited advertising during BBC output (this could usefully replace the frequent ads we now see 'bigging up' the BBC designed to encourage licence fee purchase), with top-up grants from general taxation and an extended subscription system for BBC’s premium services. The £15/month saved by licence fee payers would then be available to pay for these extra services if required. This would be a much fairer way of doing things….and would no doubt be seen as such by the electors. Piling on yet more restrictions on viewers, and a long ensuing battle with the viewing public at this stage, would not help anyone, and would certainly not help Labour’s re-election prospects. If anything it also would drive yet more consumers away from traditional TV viewing to the likes of YouTube and the other social media services.

Would the BBC survive in the hard world of commercial broadcasting ?

Possibly not – as it stands.

The change to a more commercial funding model would certainly require considerable adaptation and removal of proverbial ‘dead wood’ from the business. That said, BBC does certainly still produce some world beating output, and it would be a shame to lose the ‘soft power’ aspect of this, and the international respect  for its news services that the UK as a whole currently benefits from.

With the right management structure and appropriate talent at the top, and a change of attitude, I suspect it could adapt to the rigours of broadcasting in the mid 21^st century. Any attempt to preserve the current structure ‘at all costs’ would, conversely, be a bad idea, as it would merely defer the ‘day of reckoning’….for all concerned. As in most things nowadays, adaptability and a willingness to change with the times is key. Let's hope for its own sake, the BBC is capable of doing so....

First published 7.10.26; Revised 8.10.26