Blighty pubcaster needs extra finance for digital switch
The BBC launched its pitch Tuesday for a big inflation-busting hike to the annual license fee that will see it hit £150.50 ($271) by 2013.
All U.K. homes that own a TV set pay $227.70 a year, which generates $5.3 billion for the pubcaster.
Its previous license fee settlement gave the Beeb an increase of 1.5% above inflation for five years. That deal expires at the end of 2006, and this time round it wants 2.3% over inflation to run for seven years from 2007 to 2013.
The BBC says it needs $9.9 billion over that time to meet the government’s aims for its future, including the cost of the digital switchover. Of this, $2.9 billion is earmarked for improving content.
More than 70% of this $9.9 billion will come through cuts, including axing 4,000 jobs, but that leaves a funding gap of $2.9 billion, which the BBC says must come from the license fee.
The BBC’s request is bound to infuriate commercial rivals that argue the license fee distorts the market.
They will also be annoyed that the pubcaster is asking for a seven-year, rather than five-year, deal.
“We know that license-fee payers find the license fee a burden in their household costs,” BBC director-general Mark Thompson said. “But we also know that they are overwhelmingly in favor of the BBC spearheading these new digital services.”
This is thought to be the first time the Beeb has made a business case for an increase to its funding in public.
Because the BBC is playing such a key role in converting the U.K. to digital TV, it can drive a hard bargain.
It will now be up to the government to decide what the Beeb should get.