The world's largest public-service broadcaster, BBC, which began international broadcasting more than 70 years ago, has a record weekly global audience of 163 million. It is now facing an era of austerity against the challenges of frail finances, essentially required for creating the fantastic content that its customers and audiences expect. The ongoing digital revolution is challenging the business models which had been adopted by the BBC for so many years. After seven years of funding which has grown in real terms, it is now facing daunting investment challenges in distribution, infrastructure and technology that risk diverting money away from content creation. Besides, BBC's current vertically integrated structure is very large and the wholly state-owned entity is no longer in a position to serve the best interests of the organization.
The UK government spent around $5.9 mn on the broadcasting company in the financial year 2006 to invigorate it to stand the competition around. Although for the next 10 years its position looks secure, BBC has been arguing that public funding should continue to support it. However, after a heated debate, the government renewed its financing for the next decade with an enforced flat "TV license" on all households with televisions. BBC, which has been the cornerstone of the world media system, has been forced to accept a below-inflation increase in the license fee over the next six years. Gordon Brown, the Chancellor of the Exchequer, has blocked the corporation's demand for increasing the £131.50 license fee by 2.3% above inflation, taking it to £180 by 2014. The broadcaster will receive £2.5 bn less than it had hoped for, over the next six years. The staff union of the corporation threatened to strike after this deal. This has come as a blow to BBC, which is already facing high costs due to digital television. |
