Television
BBC seeks funding boost for new digital services
By Adam Pasick
Oct 11, 2005, 10:23

LONDON (Reuters) - The BBC said on Tuesday it wants more than 1 billion pounds in increased funding to pay for new services such as Internet broadcasting and the switchover to digital TV.

Under the BBC's proposal, the licence fee -- a tax on all television-owning households, currently worth nearly 3 billion pounds a year -- would be increased annually by 2.3 percentage points above the rate of inflation from April 2007 to 2013-14.

Currently the licence fee is set at 1.5 percentage points above the Retail Price Index.

The world's best-known public broadcaster, home to worldwide hits such as "The Office" as well as domestic favourites like "EastEnders," plans to use the extra funds over the next 8 years to roll out "on-demand" television that lets viewers choose what to watch, build out infrastructure to support digital television and a free satellite service, and create more original programming with fewer repeats.

In cash terms, assuming inflation remains constant, that would put the licence fee at more than 180 pounds by 2013-14, up more than 45 percent from 126.50 pounds this year.

The figure does not include a targeted assistance programme to help disadvantaged groups make the switch to digital TV, the cost of which has not yet been calculated by the government.

"We believe the most challenging stage of digital, with the most expensive infrastructure costs, are yet to come," said Director General Mark Thompson. "The BBC's been set quite an ambitious set of goals."

He said the corporation would offset some of the costs with 1.6 billion pounds in "self-funding," including cost savings from efficiency measures and funds from the its commercial arm, BBC Worldwide. Thompson said he was considering charging money for BBC online content abroad.

"We will look at opportunities for monetising all of our services," he said. "If that means partnering with other players including Apple, we'd be willing to consider that."

Apple is holding a media conference this week, and news reports have said it may introduce a version of its popular iPod music player that can display video. The press conference is being simulcast in the BBC's Television Centre.

The billions in licence fee proceeds make the BBC a dominant force in the media sector, with about 40 percent of the television viewership and half of radio listenership. Commercial rivals have long complained that the BBC uses its public subsidy to encroach on their territory.

The fee proposals come at the start of negotiations with the government over the broadcaster's next royal charter which begins in 2007.



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