BBC May Be Forced To Share Funding

The plan to break up some of the reported $6.4 billion that goes into British television production gained steam last week when James Purnell -- secretary of state for culture, media and sport -- told the Oxford Media Convention that it made sense to share that money.

"Do we think it's sustainable for every penny of the license fee to go to a single organization in an industry which now has very many providers?" Purnell said, according to Variety.

Channel 4 executives seem to be a part of the major push to get a piece of that public subsidy, but BBC chairman Michael Lyons told the same crowd earlier in the day that removing some of the funding from the BBC could affect shows and their quality, including both the "Doctor Who" and "Torchwood" series.

"The commercial [public service broadcasters] and the BBC compete ... for audiences, but not for revenue," Lyons said. "The result is for all the players to invest in high-quality U.K. content with -- so far, at least -- enough money from a diversity of sources to enable that to happen."

BBC operates using government subsidies allowing what proponents call a way to allow audiences to dictate programming, not the amount of money generated by advertising like in other countries, including the United States. But the BBC is not alone in providing television entertainment anymore. Some of the channel's biggest competitors now are Channel 4, which began to broadcast in 1982, as well as ITV and Sky.

"The system is coming under strain as the downturn in TV advertising and the tight license fee settlement put pressure on revenues," Lyons said. "So the question here must be: Is this the right moment to put the system under further strain by changing the fundamental nature of the license fee? Are we quite clear what the effect that would be on the system as a whole?"

The BBC has an annual budget of £4 billion, or just under $8 billion. Under the Wireless Telegraphy Act of 1949, the BBC is funded by television licensing fees as well as merchandise and programming sale to other markets, including the United States. Foreign BBC enterprises such as BBC America, BBC Canada and BBC World are commercially funded as the Wireless Telegraphy Act doesn't prevent the BBC from raising money commercially in foreign markets.

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