BBC could be a great export success story

In the coverage of Lord Hall of Birkenhead’s announcement that he will be resigning as director-general of the BBC, it is striking how much commentary has implied that an apocalypse now beckons for the Beeb, with the Financial Times describing a “broadcaster under attack on all fronts”.

Yes, there is a powerful sense that one of Britain’s bedrock institutions is at a crossroads. But at a time when another great British tradition stubbornly persists – the trade deficit – we should always remember that this period could bring incredible opportunities, not least where the BBC seizes this moment to become one of our greatest service sector exports.

It all boils down to enforcement. The BBC’s licence fee is based on the physical residential premises of the licence holder. Enforcement is lawful under UK statute, but that writ does not run overseas and so the pool of potential payees is effectively restricted to Blighty. This anachronistic “tax on telly” was fine in the days when the only route to watching programmes was via a traditional set – but technology has blown this proposition out of the water.

As I referenced in a debate last year on the licence fee, each of my three twenty-something parliamentary staffers has at least one subscription for their TV viewing, ie Netflix or Amazon Prime. In one case, these services fully usurped the licence fee, and that reflects a surging wider trend. Yet if the BBC were to offer a subscription service for the iPlayer, as an alternative to the traditional licence fee, there would be no need to geographically restrict the bulk of its regular payers to the British Isles. Instead, the world would be the BBC’s oyster, and it is brilliantly placed to capitalise.

According to the BBC, last year its international audience hit a record of 426m people per week, split between the BBC World television channel and radio’s World Service. The current licence fee is £154.50, raising £3.7 billion. A subscription is likely to be cheaper. If the charge were £6 per month, similar to the cheapest Netflix subscription, the BBC would only need to sign up 12 per cent of its global audience to raise the full £3.7 billion – but as UK export revenue, not domestic taxation.

In fact, the BBC is planning to increase its global audience to 1 billion before the next decade. On that basis, only 5 per cent of this captive market would need to be persuaded to take out a paid subscription to recoup today’s entire licence fee take, surely providing sufficient funds to cross-subsidise substantial international and domestic free-to-air programming.

Ultimately, the great value of the BBC lies not in its power to enforce an out of date tax but in its brand. Some may worry about political bias, but few would doubt the veracity of the BBC’s factual content, or the brilliance of its original programmes. This matters. The world is awash with content, but in the era of “fake news” trust and quality are scarce and therefore valued the world over. Good news for the Beeb!

James Cartlidge is the Conservative MP for South Suffolk

 

Published by The Times Red Box, 30th January 2020