As the debate on the future of the TV Licence fee continues, the BBC this week reported the number of households that chose to forego their licence in 2020 – and the possible reasons behind that number.
We also got to hear from BBC bosses regarding the place of the BBC in relation to Netflix and other competitors, and why sometimes – personalisation of content (the way Netflix recommends things for you to watch) is not such a good idea.
These remarks were made in a formal meeting of the Public Accounts Committee in the House of Commons, which was held on Monday, where three BBC executives – Tim Davie (BBC Director-General), Glyn Isherwood (Chief Operating Officer at BBC) and Charlotte Moore (Chief Content Officer at BBC) gave witness.
When the meeting started, Mr Davie gave some “glass half full statistics”, mentioning that “90% of the people in this country are still coming to the BBC weekly, and we have seen really strong performances in terms of reach, but there is no doubt we need to deliver value for the licence fee on reduced time spent.”
But when Glyn Isherwood, the chief financial officer at the BBC, was asked about people who declined to have a TV Licence in 2020, the numbers weren’t something to celebrate:
“The current figures show that 1.7 million people have taken that option and that grew from the previous year of about 1.5 million people. So that is a 200,000 increase.
“So it is still a relatively small number, and it is within the context of having annual licences of between 25 million and 26 million each year.
Licences can go up and down, but it has been between 25 million and 26 million over the last five years.”
The TV Licence fee is used to fund the BBC, and it stands (starting from April 1) at £159/year. Anyone who watches the BBC live, or streams it via BBC iPlayer, has to pay the fee.
But in addition, if you watch any live TV from any broadcaster – you also need to pay the fee (See our full guide on whether you need to pay the TV Licence fee or not).
“This number of 1.7 million”, Mr Davie added, “that say they no longer need or technically don’t qualify for the licence. It is worth saying that we are watching that number like hawks. It is the majority of our revenue, so it is utterly critical to us.
“In the land of a lot of competition, are they watching a live television stream?
“It is not surprising that when on-demand is burgeoning in the way that it is and other services are there, you are going to get some marginal erosion of people who are not watching a live stream or television.”
As expected, the Covid pandemic also had a substantial impact on the BBC’s budget and licence fee collection. As we previously reported, inspector visits have been temporarily suspended, due to the risks of the pandemic and the UK lockdown.
“At the time”, said Mr Isherwood, “we were finding it quite difficult to collect the licence fee because our outsourced service provider, Capita, had to set up a new operation, with a lot of people working remotely. People weren’t able to get out and about to pay the licence at PayPoints.
“In the first quarter, our licence fee collection was down 3% to 4%.
“We were concerned that if lockdown continued, that would continue throughout the rest of the year. I am happy to report that that hasn’t happened, and it has come back strong in the last part of the year.
“The decision we took to delay the collection of licences for the over-75s for two months, which was absolutely the right decision at the time, also cost the BBC £70 million. In total terms, our financial impact from covid was more than £200 million.”
The BBC Is Not Going To Beat Netflix
In another interesting part of the discussion, the BBC director-general explained that the BBC’s role is not to beat Netflix, or the other American streaming services.
“We need to do something radically different. The US streamers make about 200 hours of UK-originated content; the public service broadcasters make 30,000 hours. We are differently shaped. We always have sat alongside competitors.
Mr Davie was then asked about TV personalisation, and how Netflix can recommend content to viewers, according to things they have watched and liked before.
While the BBC boss did say they’re working on technological aspects of this feature for iPlayer (the BBC’s streaming app) – sometimes too much personalisation can be a bad thing:
“The one thing I would say is we don’t want to, in my view, be too editorial, and this is where I don’t think we are just simply copying the US
“I don’t know how you find it, but I find some of that personalisation too much. As the BBC, we also have a curatorial role where we, as the newsroom and as the iPlayer, can choose things that we think are important.”
Finally, Mr Davie addressed the success of iPlayer, saying that he has “a queue of people from around the world in public service broadcasting asking how on earth we moved so fast and responded in the way we have done.”
And yet, even with streaming being a success for the BBC – Mr Davie wanted to reiterate that he’s not looking to transform the BBC’s business model:
“We are not trying to make a pay subscription business work. I am there for everyone and I want to have a highly differentiated UK IP.
“I am not running a business for profit, I am running a business for purpose – an organisation for purpose, I am not even running a business.”
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