The Costs and Benefits of Public versus Private Broadcasting

In the United Kingdom, you need a license to operate a television. As of April 1, 2017, a color TV license costs £147 annually and a black and white TV license costs £49.50 annually. (At the time of writing this article, the exchange rate was approximately $1.31 to £1, according to the Federal Reserve Economic Data, which puts the rates at $191.88 and $64.61 US dollars.).

According to the Official TV Licensing website, a license is required for the viewing or recording of live television on any device (including traditional television sets, computers, mobile phones, gaming consoles, etc.), and anyone found to be watching television without a license can be fined up to £1,000. The enforcement mechanism is thorough. According to their website, TV Licensing will send letters, make phone calls, and even send representatives to unlicensed addresses in an effort to determine whether a property is in need of a license. They also send around detector vans, with (secret) technology to catch evaders (One frequently asked question on their website is How do the detector vans work? TV Licensing has essentially declined to answer, fueling rumors that the vans may only be a fear tactic, although TV Licensing is adamant that they are real.).

Regardless of the van controversy, the £147 annual fee is certainly real. What does the license pay for?

The license fee goes to the British Broadcasting Corporation (BBC) to fund television, radio, online, and other types of programming. The BBC is a public broadcasting network, which means that it has a goal of public service and may be partially (or completely) subsidized by the government. In the UK, public broadcasting holds a highly prominent position in the creation and distribution of news and entertainment media, and the BBC has long been the most watched television network in the UK. It is not, however, the only one. Aside from other BBC owned channels (BBC One, BBC Two, BBC Four, BBC News, BBC Parliament, CBBC, and CBeebies), there are also a limited number of commercial television networks, the most prominent being Independent Television (ITV)–although, those who prefer the UK’s commercial networks to its public ones must still pay the license fee.

In the United States, public broadcasting is largely secondary to commercial broadcasting. Although public broadcasting corporations in the US, such as PBS and NPR, receive some government support, they are largely funded through independent contributions (such from viewers like you–thank you!), and have much smaller budgets than do public broadcasting companies in the UK.

Which system is better? Well, that is a subjective question, and therefore impossible to answer, but there are arguments to be made.

Notably, the BBC does not sell advertising time. Although there may be a few minutes of promotion for other content on the network at the beginning or end of a program, this content does not absorb nearly as much of a program’s runtime as do commercials on a commercial network. For example, UK television programs that are considered to be an hour long typically have 58 to 60 minutes of content. In the US, so-called “hour long” programs are actually 45 minutes, with 15 minutes of commercials.

What about the cost? £147 a year, or approximately $191.88, is not nothing. However, US cable subscriptions can often cost more than that. Prices (obtained from a bit of searching around on various television providers’ websites) range from $29.99 per month (or $359.88 per year) to $59.99 per month (or $719.88 per year) and beyond, not even including internet and phone. Granted, the £147 license fee does not include any subscription fees to pay broadcasters in the UK, which provide viewers with a wider variety of channels. For example, one popular provider, Sky TV, offers packages starting at £22 per month (or £264 per year) and higher (that is approximately $28.75 per month and $345.02 per year.). This is around the same price as the least expensive package in the US, but the TV License fee must be paid on top of that amount.

Which system is preferable, then, depends on how much a particular viewer values the variety offered by private broadcasting. If the US relied as heavily on public broadcasting as does the UK, US viewers may not be able to enjoy the incredible wealth of channels currently available to them. Then again, how many channels does one person need? Surely television channels have diminishing marginal returns. There is only so much time in a day to watch broadcast content.

One might be tempted to put this argument aside in favor of streaming media, such as Netflix, Amazon Prime, Hulu, and HBO Go, but as more content owners pull content from existing streaming media sites in order to start their own (Disney, for example, which recently announced a plan to start its own streaming service) the total price of these subscriptions begins to look a lot like the price of a cable subscription. That, however, is an article for another day.

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