BBC Faces Biggest Overhaul in Decade, May Lose Massive License Fee

Levies Annual Charge on U.K. Households with TVs

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'Doctor Who' on the BBC.
'Doctor Who' on the BBC.

The British Broadcasting Corp. may lose its income from license fees and have to rely on a subscription service as it faces its biggest shake-up in a decade.

Among options in the U.K. government's review of the world's biggest public broadcaster is the selling of BBC Worldwide, one of the organization's biggest money-spinners. It will also be asked why it shows commercially driven programs such as "The Voice," a Saturday-night talent show.

"We must consider whether the BBC should continue to try to be all things to all people," U.K. Culture Secretary John Whittingdale told lawmakers Thursday in detailing the review.

The BBC is under pressure to defend a funding model that generates 3.7 billion pounds ($5.8 billion) a year by levying an annual license fee on U.K. households with TVs. The government is using the 2017 renewal of the BBC's agreement to operate, known as a Royal Charter, to begin a sweeping study of it amid accusations the broadcaster has grown too unwieldy and expanded beyond its original mission.

The BBC already is in the midst of an overhaul to deliver more than 1.5 billion pounds in savings annually by next year. It is closing some offices, sharing sports rights and is to move the BBC Three TV channel online. It said earlier this month that it will ax more than 1,000 jobs, about 5% of the workforce.

Online content
Whittingdale also raised the prospect of charging for "catch-up" content online on the BBC's iPlayer service. He said the government intended to close the "iPlayer loophole" within a year so that viewers cannot watch for free. The current license fee, which has been frozen for seven years, is 145.50 pounds for a color TV.

Chancellor of the Exchequer George Osborne already announced in his budget last week that the cost of funding free TV licenses for people over 75 years old will be transferred from the government to the BBC between 2018 and 2021.

The BBC's "imperial" ambitions for providing content create the risk it could "completely crowd out national newspapers," Mr. Osborne said in an interview with the broadcaster before the budget.

There are "big questions to ask about the future of the BBC," BBC Trust Chairman Rona Fairhead said in a statement in response to Whittingdale's remarks. "The debate must not be a narrow one and the clearest voice in it must that of the public," Fairhead said.

~ Bloomberg News ~

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