UK ministers consider ads and subscriptions for BBC as part of funding rethink

Ministers have opened the door to a radical transformation of the BBC’s funding, with ideas ranging from introducing advertising across its channels to a paywalled premium subscription.

The BBC is entering into negotiations over a new 10-year charter, drawn up by the UK government, setting out its future funding and scope when its current arrangement ends in 2027.

In a wide-ranging green paper on the future of the corporation published on Tuesday, ministers have asked for views on whether the BBC should be funded through targeted or full advertising across all BBC platforms.

Options opened for consultation also include a subscription covering its more commercially orientated programmes that would leave a smaller range of licence fee-funded content available to all via live television and BBC iPlayer.

Another option would be for a subscription service just for older BBC content. The government is also looking at whether the BBC could generate more revenue by putting content on third-party platforms such as YouTube.

The corporation at present gets most of its income from the licence fee, which costs £169.50 a year per household, although it also makes money from selling TV shows outside the UK through its BBC Studios arm.About £2.2bn was generated by commercial activities last year, while £3.8bn came from the licence fee.

The licence fee has attracted criticism for its regressive nature, with all users required to pay the same rate regardless of income. The green paper suggests options for reform, such as a concessionary rate for some households. The document makes clear that the government is “keeping an open mind about the future of BBC funding and we have not yet identified a preferred model”.

The publication of the long-awaited green paper was overshadowed by the $10bn lawsuit filed on Monday by Donald Trump over a misleading edit of a speech in a BBC documentary. This led to the resignation of director-general Tim Davie and news chief Deborah Turness in November.

Applications to replace Davie, who is staying on as director-general until a successor has been named, will close this month, with several names being linked to the job, including Jay Hunt, creative director of Apple TV+ for Europe; Jane Turton, chief executive of TV producer All3Media; and Kevin Bakhurst, director-general of Irish broadcaster RTÉ.

The green paper also sets out ways to strengthen the BBC’s independence, including considering the government’s role in board appointments and updating the BBC’s objectives to give accuracy equal importance alongside impartiality.

It also looks at whether the BBC should have new responsibilities to specifically counter misinformation and disinformation.

A white paper setting out government proposals for the BBC is expected to be published next year.

Davie said the BBC welcomed the publication of the green paper and start of the public consultation. “We urge everyone who cares about the success of the UK’s world-leading creative industries to have their say.”

He added that the broadcaster wanted change, and to “secure a public service BBC that is independent, sustainably funded for the long term, and meets our audience’s needs”.

BBC executives worry that the broadcaster is facing an existential threat as its audiences increasingly move online, where deep-pocketed tech rivals such as YouTube dominate the market.

Some of the proposals will challenge the BBC’s mission to provide universal services that inform, educate and entertain. Any subscription model will mean that those who do not pay will not have access to the same content at the same time, for example.

The proposal to introduce advertising will also spark concern among commercially funded rivals such as ITV, Sky and Channel 4. Earlier this year, the BBC was forced to backtrack on plans to put adverts on some of its podcasts for UK listeners on sites such as Spotify after Britain’s biggest media companies objected.

The corporation’s income has dropped about a third in real terms over the past decade, leading to extensive job cuts and plans for an annual savings target of £700mn a year by 2028.