Scrapping the licence fee would pose an existential threat to many local radio stations and could lead to devastating budget cuts at Radios 1 and 4, a new report has revealed.
The study, conducted by economists at Compass Lexecon has found that a commercial ad-funded model will have a ‘devastating effect’ on both the BBC and commercial radio at large.
Commission by industry body Radiocentre ahead of a government review into the historic broadcaster’s funding model, the report shows how BBC Radio 4 and BBC Radion 1 would need 50% and 25% budgets cuts in order to remain viable.
The impact on the BBC’s myriad local radio stations would be even more considerable, with the vast majority needing to be scrapped as the broadcaster would face a 63% shortfall in the revenue needed to maintain existing services.
“This study demonstrates that introducing advertising on BBC radio and audio services is a dangerous road to go down and will ultimately be bad for everyone. It would have a devastating effect on the BBC and commercial radio, as well as a huge impact for audiences, with the disappearance of public service radio as we know it and less choice available in future,” Radiocentre CEO, Matt Payton said.
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“While we recognise this is only one scenario, even partial advertising would have a significant negative impact. These findings are stark, and we hope that both the government and the BBC will take them into account.”
Coming only weeks after the BBC announced that it was planning to phase in advertising around some of its original programming streamed on external platforms such as Apple and Spotify, the report warns that the wider advertising placement availability that would results from such a move could lessen the overall value of ad spots.
Worryingly, analysis reveals that the move could spark a 36% fall in commercial radio revenue across the board, causing the closure of many smaller, specialist stations.
Responding to the report, a BBC spokesman added: “We have no plans to introduce adverts on BBC Radio. The licence fee is in place until 2027 and it is absolutely right there is a debate on how or whether it needs to evolve in future and how the BBC is best funded to ensure it continues to thrive.
“We want the public to be at the heart of this, which is why next year we will conduct a major public consultation on our future.”
1 Comment. Leave new
I am in favour of the BBC remaining ad-free.