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BBC should ax license fee, says report

Adam Smith Institute recommends subscription model

LONDON — A BBC funded by voluntary subscription rather than the mandatory license fee would allow it to compete head-on with Hollywood as an international entertainment studio, according to a report by a right-wing think tank.

“Global Player or Subsidy Junkie — Decision Time for the BBC” is published by the Adam Smith Institute and written by British media consultant David Graham.

Arguing that the success of News Corp.’s paybox BSkyB demonstrates the robustness of the model, Graham suggests scrapping the BBC license fee by 2015 and replacing it with a voluntary subscription of £145 ($230) a year, the license fee’s current level.

The reports says that this could give the BBC “the global presence of a Hollywood studio but with a wider range of output.”

Graham said, “Continuing with the current funding model means justified hostility from the rest of the industry, contraction and decline for the BBC.”

He maintains that the license fee now paid by all TV-owning homes is “unfair and obsolete” in the Internet age.

“The new government seems ready to rethink fundamentals. I hope this paper will help to encourage a serious debate, at a critical time, about a very important British institution,” Graham said.

Graham, a former BBC producer, runs consultancy and broadcast data firm Attentional, whose clients include U.S. studios.

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