TV Funding

TV companies are all different and all get their funding money from many different ways. For example BBC is funded mainly by the license fee which is a fee that must be paid in order to own a television; license fee is £145.50 for colour and £49.00 for black and white. This gives the BBC millions of pounds every year for them to spend. However because they are funded by the license fee, this means that the BBC are a public service broadcaster, this means that they must produce original programs as well as show programs from other channels, they are not allowed to advertise on any BBC channels, radio stations or websites in any way and they cannot show any media bias whatsoever. BBC is also funded by syndication which means selling BBC original programs such as Top Gear and My Family to other channels worldwide. As well as this, they are funded by competitions which sometimes appear after or during certain programs such as Newsround where people can phone or text in with an answer to a question in an attempt to win a prize advertised, phoning or texting in will cost money all of which goes to BBC’s funding. Merchandising is another way in which the BBC are funded, selling merchandise based on some of their shows, e.g. a t-shirt with a character from a program such as Tracy Beaker on it. The money spent on items like these will go to the BBC.

Commercial channels such as ITV and Channel 5 are funded mainly by advertisements during the breaks of their programs, companies will give money to ITV/Channel 5 to advertise their product on the channels so more people will be aware of the product and what it does etc. ITV and Channel 5 do not get any of the license fee. Likewise to BBC, ITV also raise money from syndication, competitions and merchandising. Competitions are used on major ITV shows such as X Factor and Britain’s Got Talent to attract more people to phone/text in with their answers in order to make ITV more money, X Factor based merchandise can also help raise money for ITV. Also programs like X Factor can raise massive amounts of money from viewers phoning in to vote their favourite contestants, X Factor is such a popular show that they raise millions from votes especially as it comes closer to the final. Also with events like the X Factor final, World Cup games, and Champions League finals, because there will be so many more viewers than normal, companies must pay extra money to have their products advertised because so many more people will see them, this gives channels like ITV and 5 even more money on top of the current methods of funding. Channel 4 is a unique channel because it is partially a public service broadcaster like the BBC, but also partially commercial like ITV and Channel 5. It receives some of the license fee but not nearly as much as the BBC because it can be funded by advertisements which is another major form of TV funding. As well as the license fee and advertisements, channel 4 is funded by syndications, competitions and merchandising.

TV companies such as Sky and Virgin that people subscribe to, earn their money mainly from customer subscriptions. If people want to watch the channels that these companies are showing then they must pay a certain price, and for extra channels like Sky Sports and Sky Movies, even more money must be paid and because the premier league is broadcast only on Sky Sports, it massively increases the amount of subscribers because the premier league is so popular. Sky Sports also broadcasts other major sporting events and most recently has acquired shared rights to broadcast Formula 1, shared with BBC who are the current broadcasters. Typically Sky Sports subscribers cancel their subscriptions at the end of May when the football season finishes and renew it in August when it restarts, but the Formula 1 world championship has races through this period so it may stop so many people cancelling their subscriptions. Sky/Virgin also raise money from syndications, selling original programs such as Dream Team to other channels for them to broadcast. Advertising is also used to raise money for Sky/Virgin as well as the usual methods; competitions and merchandising.

I think the license fee is a good idea because the UK needs a public service broadcaster and the BBC is a very good one so it’s fair enough that the community have to pay for it, but I don’t think a fee should have to be paid just to own a TV, I think you should have the option to not pay the license fee but have no access to BBC channels but be able to watch other channels not operated by BBC. I also think the license fee is a bit too expensive and should be reduced.