BBC would do 'very well' on a Netflix-style subscription model, chairman admits

The BBC would do “very well” if it moved to a Netflix subscription model, the corporation’s chairman has admitted, although he insisted the licence fee will stay.

Sir David Clementi said a change to a subscription-based system would alter the very core of what the BBC represents.

He told the House Of Lords Communications Committee: "The licence fee is at the heart of what we do. It makes a direct relationship between us and the public. That direct link is very important us.

"I actually think the BBC might do very well under a subscription model, but it would not be the BBC you and I know.

"It would be there to serve its subscribers. And the subscribers by their very nature are those who are better off.

"The direct link with the licence fee is, I think, very fundamental to us at the BBC."

The BBC has scrapped free TV licences for most over-75s, restricting them to those who claim Pension Credit, causing a fierce backlash.

Lord Tony Hall, the BBC’s director general, blamed government austerity for the decision to introduce the expensive concession, which would have cost the broadcaster £725 million by 2020.

"Remember the context of this: 2015, height of austerity, incoming Conservative government,” he said.

"I remember the conversation with the then secretary of state, that this was going to happen come what may.

"We took on this policy, and it was made quite clear at the time that the policy would come to us and we would have to consult on it, and that is exactly the position we're in now.

"We have to find a way of doing this in public."

Sir David criticised the lack of transparency in the political negotiations.

"We think the manner in which the 2010 and 2015 settlements were done was poor,” he said.

"They were done behind closed doors, very little input from the BBC, none at all from the public.

"Really, for a government that believes in transparency, a pretty odd way to go about business.

"We think in future it must be evidence-based, a proper consultation. There needs to be a public debate.”

Lord Hall also said the BBC must be careful not to rely to heavily on Netflix financially.

He said the increased cost of drama had made co-productions a short-term solution for the BBC but that it would work with the online platform “much less” in the future.