BBC Eyes New Funding Routes As It Looks To Fight “FAANGs”

The BBC wants more money to fight the FAANGs – a move that could see it raise funds from outside of its traditional licence fee model for the first time.

Director General Tony Hall admitted that it wanted to be able to “raise more money.”

“I’m making the point that we need to find more money. I’m saying that could come from a variety of different sources. We’ve never had a proper debate about funding, it’s always been [the BBC’s budget is] too big, cut it. What is the right level of the funding for the BBC?”

The move could see the British public broadcaster raise funds in a similar way to its commercial arm BBC Studios, which has recently partnered with the likes of Tinker Tailor Soldier Spy financier Anton and Danny Cohen’s Access Entertainment to fund premium drama.

Speaking at the Royal Television Society London Conference, Hall claimed that it needs to raise more money to fight the $8B that Netflix is spending on content this year and the $5M he claims that Amazon is spending. To put this into context, the BBC and the other British public service broadcasters spend £2.5B together.

“While their spending is going up, ours is going down. In those ten years, while the big shift was getting going, Ofcom’s data shows that the public service broadcasters reduced their annual spending on new British content by around £700m in real terms. If you go back to 2004, the fall is around a billion pounds amongst us. As the BBC has been forced to spend less because of a cut in the licence fee, so the other PSBs have spent less too.

“Netflix and Amazon are not making up the difference. Ofcom’s data suggests that less than 10% of the catalogues of Netflix and Amazon are comprised of content produced in the UK. Two separate recent estimates have suggested their investment into new UK programs is around £150m a year. Co-production helped make up the difference for a while, but those deals are becoming more rare. You can argue about the size of the future gap, but there’s no doubt there is a gap today in funding public service broadcasting, and there’s going to be one in the future. This isn’t just an issue for us economically, commercially or as institutions. There is an impact on society.”

Hall highlighted a “further narrowing” of the range of “distinctive” British content such as Three Girls (pictured) and Mother’s Day.

“High quality production costs. And it costs millions. A decade ago, premium high-end drama might have cost £1 million an hour in today’s money. Premium drama today costs many times that figure routinely. That has resulted in the BBC needing to spend significantly more just to stand still,” he added.