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The BBC is “open-minded” about becoming a subscription service, its director general and chairman both said on Monday, as they acknowledged that the corporation faces an “existential question”.
Mr Davie told a House of Lords committee: “We believe in something that is available to all and delivers on public service objectives. You have to be open-minded as the world evolves and say: ‘OK, what is the right funding mechanism for that?’”
Alternative models include a two-tier system, as proposed last week by Andrew Neil, the former BBC broadcaster. That could mean “core” services such as news, children’s programming and major sporting events being preserved as public service broadcasting and funded at low cost by the taxpayer, but viewers paying a top-up subscription for entertainment and drama.
Asked if the BBC was considering “some form of two-tier BBC”, Mr Sharp said: “The board hasn’t ruled out anything. We are taking a blank sheet of paper.
“We’ve been charged with the fact that the BBC faces an existential question and the board has to take that very seriously, and to look at all options without preconceptions.”
He added: “The fact we understand the value of public service broadcasting informs that. But it doesn’t rule out certain mechanisms or adjustments we might need to make. Of course, we have to change … the issue is that change has to be thought through, particularly if it is fundamental change.”
Mr Davie said of a two-tier subscription system: “What we need to do, primarily, is make sure that the public service [provision] offers outstanding value for money at its core. We’ve got to debate how the core is funded and we should be very open-minded about what that core is.”
Nadine Dorries, the Culture Secretary, has called the licence fee “completely outdated” and stated that the Government is ready to implement a new way of funding once the BBC’s current charter runs out in 2027.
Mr Sharp said: “The BBC has a duty to lead this. But what the BBC has to do is be humble enough and recognise the decision is for Parliament, because Parliament as a whole represents the people.
“We are going to be sophisticated enough to conduct an objective evaluation which will be collaborative and involve significant consultation.”
However, both warned that there would be considerable “jeopardy” in throwing out the current model and replacing it with something untested.
Questioned about the viability of putting some programmes and services behind a paywall, Mr Davie said: “The unintended consequences here could be very high should we get it wrong. I think the stakes are incredibly high in terms of making those right choices. And I say that whatever model evolves, you are going to have to have a very significant transition.”
The BBC plans to launch a public consultation, to ask viewers and listeners what they value about the broadcaster and how they believe it should be funded.
The committee also asked about the BBC’s dwindling popularity with younger audiences. However, Mr Sharp said he was not unduly worried - claiming that teenagers and 20-somethings should be “media-promiscuous” and spend time on video games and TikTok, rather than watching hours of BBC television.
Young people will grow into the BBC and take it up later in life, he claimed.
“Within households, different people are going to be involved with us at different times, in different ways and in different parts of their lifetime,” he said. "So they may not be there as youth, but they may be there when they engage with their children.”