BBC director-general Matt Brittin has said the corporation is “held back” by its TV licence fee which is “no longer fit for purpose”.
Mr Brittin, who succeeded Tim Davie as head of the BBC almost seven weeks ago, was speaking as he appeared before the Culture, Media and Sport Select Committee for its inquiry into the future of the national broadcaster.
The former Google boss, 57, discussed the longevity of the BBC’s licence fee – which is the main source of funding for its television, radio and online services.
The standard TV licence costs £180 per year and is legally required to watch or record television on any channel or service, watch live on streaming services or to use BBC iPlayer.
It has faced controversy due to a declining relevance as viewing habits have evolved, and it has been suggested the BBC could move to funding through commercial advertising or a subscription model.
Appearing before MPs on Wednesday, Mr Brittin said: “The BBC is locked into yesterday’s model of consumption. The licence fee is payable on linear television and iPlayer when the world’s moved on.
“Consumers are living in today’s world – or tomorrow’s world today – and so we need to look again at the mechanism for funding the BBC as part of the charter.”
He continued: “Obviously the BBC’s independence and future depends on having universal, sustainable, and scale funding, and I think that’s really important.
“I think the BBC is still relevant to young people, but it hasn’t been going where the audience is – and coming from a world of technology, I know that very well.”
Mr Brittin acknowledged the BBC is making progress, but said “it needs to go further”, adding: “It’s held back by that straitjacket of the current licence fee mechanic, and obviously that’s no longer fit for purpose.”
Mr Brittin said he thinks the BBC using commercial advertising, similar to other television channels, would “take it away from others” and said this “would be a devastating impact on the economy”.
He also addressed the idea of a subscription model as used by streaming services such as Netflix or Disney+, calling it “compelling in terms of extending (the licence fee scope) to reflect the reality of today’s audiences”.
Mr Brittin was also asked about the “emails of doom” sent to colleagues earlier this year when the BBC announced it would cut 2,000 jobs as it aims to reduce costs by 10% over the next three years.
The corporation announced 550 job cuts in news, nations and TV and radio content last month as part of the first stage in its savings plan.
Mr Brittin said: “I came in with the need to save 10% of cost already announced, and I’ve been working with the team when we made the first set of announcements. There will be more to come about how that restructuring happens.
“My job is to do two things: come in and make sure that we are operating within the envelope we currently have, argue for a better funding solution for the future, and to reshape the BBC for the future.”
He was also questioned about whether he will “play it safe” as the director-general, particularly if the corporation faces controversy with him at the helm.
He said: “I think no programme or presenter is bigger than the corporation, particularly a corporation that is funded by the public, and that’s why I think the bar is rightly high for the BBC.
“I think the scrutiny is a high level of scrutiny – sometimes it’s very polarised from people with a commercial interest in how they’re covering the BBC, but I accept that responsibility.
“I come into this with my eyes wide open.”
