There’s an idea being floated in the ranks of power that the BBC should be made to pay its own way. The concept is that through its own endeavours, the BBC should fund its activities and perform as a commercial organisation would have to. I disagree and I’ll tell you why.
If the BBC had its 40p a day public funding removed, it would have to fight for revenues in the shrinking market of advertising, it would have to ramp up its commercial output, it would have to cut costs and it would have to change its output to meet the demands of a commerce. Not such a bad thing you might think. You would be wrong.
According the BBC’s 2008-2009 annual report its income is derived from the following sources:
- £3493.8 million in licence fees
- £775.9 million from commercial business
- £294.6 million from government grants
- £41.1 million from other sources such as overseas sales
Recently, it was reported that Internet Advertising had overtaken television advertising, with a record of £1.75 billion spent in the first six months of 2009. So, we’re talking about a comparable period. Extrapolating from that, making the assumption that advertising spend remains constant at this record level, we can assume that the Internet will generate £3.5 billion in advertising revenues in year. This is roughly the same as the cost of the licence fee and more than the total spend on television advertising. So, for the BBC to replace its licence fee with advertising, it would have to take ALL the advertising revenue from the ITV companies and then find some more.