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The BBC is funded through the £159 annual television licence fee, yet the public broadcaster has faced increased calls to replace the charge with alternative funding methods.
Last week, Culture Secretary Lucy Frazer said the BBC may need to look at a “variety of sources” to keep it afloat, confirming that the Department for Culture, Media and Sport has started a review.
The South East Cambridgeshire MP told the BBC’s Laura Kuenssberg show on Sunday: “I do think it might need to look at a variety of sources for its funding. The licence fee isn’t the only way.”
The BBC has received funding through a licence since 1923, with all households watching or streaming live programming paying the fee. The price is set to increase by £13 next year in line with inflation after being frozen for two years.
The current funding arrangement ends on December 31 2027, by which time a new funding model must be approved.
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Ms Frazer said that going forward, the broadcaster may need to look at a “variety of sources” to keep it afloat as she insisted the licence fee “isn’t the only way”.
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In place of a licence fee, the BBC could follow streaming services and adopt a voluntary subscription model, with a monthly or annual price to view the BBC’s programming.
It could also turn to advertisements to generate revenue or introduce a broadband levy on every connection in the UK to fund public service media.
The UK Government could follow Australia by funding the BBC with an annual government grant, yet this could compromise the broadcaster’s independence.
Another option is for a new tax to be introduced on Britons’ incomes to fund public service media. Sweden introduced such a tax in 2019, equating to one percent of taxable income.
A BBC spokesman said: “We are open-minded about the future and it is right there is a discussion on if and whether the licence fee needs to evolve.”
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