Licence fee, accountability and overseas opportunities central to BBC's future

BBC is looking at opportunities at home and abroad to secure its financial future.

"My strategy is very simple," says Tim Davie, BBC’s director general speaking at FT Live’s Future of News event. "Do you and your family get £159’s worth of value for every household?"

Davie is referring to the licence fee; oft-criticised but an essential source of revenue for BBC. The latest figures show that in 2019/20, the licence fee generated £3.52 billion (71 per cent of its total £4.94 billion income).

BBC came under fire for scrapping licence fee exemption for over-75's last year, with only those receiving Pension Credit benefit not paying. This year, the broadcaster also decided to continue criminal sanctions and fees against those evading the licence, with a maximum penalty of £1,000.

"It wasn't cryptic, it was very clear that we thought the logic behind decriminalising the licence fee was problematic," says Davie.

...our system is based on trust: impartiality and trust are sacrosanct to us.

"You're either in this system or you're not. This is a universal intervention. It's slightly strange, but it's a wonder. It grows the creative industry and it works. To me, it's a precious thing for the UK. It's mired globally, but it's one of the things we do well."

It does mean that licence fee holders and UK taxpayers have every right to question how their money is being spent and the standards of the broadcaster. The most notable recent example is the scandal involving journalist Martin Bashir who faked documents to obtain an interview with Princess Diana in 1995.

Addressing these issues is more pressing given that Davie's mantra since becoming director general in 2020 is an emphasis on impartiality to win back audience trust.

"The worry for us is that our system is based on trust: impartiality and trust are sacrosanct to us. You can give up trust quite quickly, and it takes a lot to win it back," he continues, adding that he encourages leaders to write the story however critical it is of predecessors or its own systems.

...in this age, accountability is everything.

"The one thing I've learned in life is you have to go and get facts and share them openly. If I'm being really provocative, I'm less interested in comms and how to spin the story. Forget all that. Go and find out what happened and deal with it. If you do that you can move on, and in this age, accountability is everything."

However, it is not just British viewers tuning in. Last year, BBC revealed its ambition to reach 1bn worldwide viewers by the end of the decade. BBC's growing international presence means it has to think carefully about how to spend resources in other countries and cash in on those viewers given that UK viewers are its priority.

For instance, the BBC has a large presence in Afghanistan but commercial interests are not at the forefront of its mind there. BBC Studios, its premium content company, also generates around £1.4bn in revenue and offers scope to grow production and subscription revenue overseas.

Consider the US, where it has already gathered momentum through Britbox, its online digital video subscription service in partnership with ITV, which has amassed half a million sign-ups since launching in 2019.

Around £250m of the total licence fee income is spent on content beyond UK borders, plus around £90m from the government's Foreign, Commonwealth and Development Office budget. Conversations to borrow from this pot to allow for further investment are possible in the future.

"It does make sense to spend a proportion of UK revenue to make sure we have a good global presence - but there is a limit to that," concludes Davie.

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