by Philip Miller MBE, Executive Chairman of Radio Essex
Like many others, I was angered to learn that the BBC will scrap free TV licences for more than three million over-75s. The corporation’s chairman, David Clementi, claimed it is “under severe financial pressure”, threatening to close several TV and radio stations as a result. For the BBC to do this in the middle of an extreme crisis shows an incredible lack of self awareness. The truth is, the BBC is mismanaging licence fee funding which amounts to around £4 billion per year.
Based on my own experiences, it is clear that the Beeb needs a reality check. We have owned and operated a local commercial radio station in Essex for over 10 years. We know all too well the costs and challenges of running a radio station solely funded by advertising revenue. The Beeb has no such worries, it relies on a virtually guaranteed income just because millions of Brits own a television.
BBC Radio had a budget of over £500 million in 2018-19 and attracts 33.5 million UK listeners every week. Compare that to commercial radio which garners 36.3 million with a similar income from advertising. Of that income, commercial radio has to pay for advertising sales teams and try to make a profit in a fiercely competitive market. Unlike the BBC, with it’s licence fee comfort blanket.
The BBC has another massive advantage too. It owns the premium national FM transmission networks, having four national stations compared to only one national FM commercial station, Classic FM. So why, with all this financial and technical firepower, is commercial radio outperforming the BBC?
Perhaps they are catering for more diverse audiences being a public service broadcaster? No, Ofcom has criticised the Beeb for failing to attract young audiences. Furthermore, BBC BAME audiences for radio is 37 per cent compared to commercial radio reaching 57 per cent.
Perhaps they are investing in innovation within radio? No, in the BBC’s plan for radio is to create new stations that replicate commercial stations which already exist. Commercial radio however continues to innovate, launching new stations such as Times Radio, Virgin Radio, Scala and dozens more over the past two years.
Perhaps the Beeb’s focus is on providing news and speech radio services with higher cost? I would argue that this is where commercial radio is excelling. There has been soaring nationwide growth for LBC, talkRadio and sister station talkSport. Take LBC, between 2014 and 2019 its audience has grown from 13.4 to 25 million hours of listening each week. In the same period, BBC Radio 4 has suffered a decline of over 7 per cent.
The reason for the BBC’s inefficiency is clear. Our rivals at BBC Essex, which broadcasts to the same area, employ more than four times as many news and programming staff as we do, by our calculations. Based on my experience I would estimate the additional staffing costs to be between £1-1.5 million for Essex alone. Scale this up across the country and the inefficiency of BBC radio networks is enormous.
You’d think BBC Essex would be out performing us left, right and centre. Not so. The latest figures show our audience has increased hours listened by 49 per cent in the last 12 months whilst BBC Essex has declined by 31 per cent. They could learn a thing or two from the private sector it seems.
The TV licence now costs an eye-watering £157.50 and is backed up by the threat of imprisonment if unpaid. Put simply it is a TV tax. But worse still, ‘Auntie’ forces us to pay for a service that is incredibly poor value for money.
That’s why I support the TPA’s campaign to Axe the Tax. The current funding model unfairly shields the BBC from commercial pressure. But despite this taxpayer-funded safety net we are now seeing her nasty side more clearly than ever. Swiping free TV licences from millions of over-75s in the midst of the coronavirus crisis is a disgraceful decision. Ministers must act. First, they must decriminalise non-payment of the hated TV tax and second, they must abolish the charge altogether. It’s long overdue for the BBC to move into the 21st century and stand on its own two feet. Let people choose if they want it or not.