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Monday 16th May 2022

How will the BBC TV Licence freeze affect me? Everything you need to know about the broadcasting fee freeze

Licence fee payers will enjoy a freeze on the price they pay for the next two year.

The Government says it is part of a package of measures to reduce the financial strain on households dealing with rising prices.

The current licence fee is set at £159 per year. The Government will freeze funding for the BBC for two years and is also looking to start a debate over whether the BBC should continue to be funded by a licence or be abolished completely in 2027.

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Currently the BBC earns about three quarters of its income from the licence fee, and around a quarter from selling its programs around the world.

What will happen next?

The BBC could have to negotiate an entirely new funding model with the government when the licence fee funding deal expires in 2027.

This would mean households with live TV services would no longer be liable to the £159 a year levy, which has been widely criticized as it imposes higher relative costs on poorer families.

The BBC also took the controversial decision in removing the exemption for the over-75s, but this was delayed thanks to events during the pandemic.

Potential future alternative funding options include a subscription service, introducing a broadband levy, or direct government funding.

Tim Davie, director-general of the BBC says: “We need to reshape ourselves for a digital age”.

“The media market is moving extremely rapidly, I’m excited about re-engineering the BBC. I think we’re in a good place.

“We had an excellent Christmas, iPlayer is doing brilliant business for us in terms of the numbers we’re getting through to our digital services.

“So we’re not just going to put aspic around linear services or say we’re going to keep doing exactly the same thing. We need to reshape the business.”

How much does the BBC licence cost now?

The cost of an annual licence, required to watch live television and access iPlayer services, will remain at £159 (£13.25 per month) until 2024 before potentially rising for the following three years, depending on what the Government decide.

What other alternatives are there to the licence fee?

The licence fee pays for a wide range of BBC services including TV, radio, the BBC website, podcasts, iPlayer and apps.

However, if you don’t regularly watch the BBC live on TV, then you can pay a voluntary subscription fee for apps such as Netflix, YouTube and Amazon Prime.

You don’t have to pay the licence fee, but if you opt out then you must not use your V to watch live channels, or use the BBC’s digital services such as iPlayer.

Will the BBC have a subscription-based membership?

Discussions are still ongoing, but as far as we know:

– The BBC could also follow in the footsteps of ITV and Channel 4 and start hosting advertisements.

– The Government could support the BBC financially through an annual grant.

– A combined approach could be a solution too – funding from a licence fee, plus a Netflix-style subscription service could fund BBC’s big budget dramas.

Photo by Compare Fibre on Unsplash

Dana Raer

Reporter

Dana is a reporter at Mouthy Money, having previously worked for Times Money Mentor and the BBC.

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