Draft BBC Charter sets the stage for a subscription service

By Aarthi Rayapura September 15, 2016

A few months after its White Paper, the UK government has published the first official draft of the next BBC Charter. The crucial document, which sets out the broadcaster’s funding, corporate structure and general approach to programming, comes with a few crucial changes. After all, it’s been a decade since the last Charter was drawn up — a lot has changed in that time, both politically and inside the media industry.

Protecting the licence fee

The licence fee is divisive among the British populace. Some see it as an outdated form of funding which penalises infrequent viewers. Others believe the mechanism is vital to the BBC’s success as a public service broadcaster, removing it from the whims of advertisers and giving it the freedom to take creative risks. The new BBC Charter will ensure the licence fee rises with inflation over the next five years, starting in 2017. The government believes there are “drawbacks” to the system, but admits it’s still the best way to fund the broadcaster over the next decade or so.

A change in governance

Under the new proposals, the BBC Trust will be abolished. The independent governing body will be replaced by a new BBC Board made up of 14 members, of which nine will be appointed by the broadcaster itself. The chair will be selected through a government-led process, while the final four will be chosen as representatives for Scotland, Wales, Northern Ireland and England. In addition, the BBC will be held to account by Ofcom, the UK’s media watchdog. The regulator will review any proposed changes by the BBC to its core services, as well as complaints submitted by viewers.

A subscription service

It’s long been rumoured that the BBC wants to set up a subscription service. While much of its funding comes from the licence fee, it’s keen to look at alternate forms of revenue (consider the iTunes style BBC Store, for instance). A subscription service could be used to boost its commercial revenue, especially in markets such as the US. The new Charter states that the BBC “may develop, test and pilot such a service, with the approval of the appropriate Minister.” In the previous White Paper, the government stressed that a subscription model couldn’t be used to “top up” or replace any service already supplied by the licence fee. Such an offering would, therefore, need to offer entirely new features or content in the UK.

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