The Producers Alliance for Cinema and TV (Pact) has published a report exploring the implications of contestable licence fee funding. Frontier was commissioned by the BBC and Pact to examine how the current licence fee funding model operates both in theory and in practice, and to assess this model against the benefits and risks of creating a contestable licence fee fund.

The BBC Charter Review consultation, published by the Department for Culture, Media and Sport (DCMS) in July 2015, examined whether non-BBC providers should be able to access an element of licence fee income. Frontier’s report found that a contestable licence fee fund is unlikely to increase the degree of competitive pressures faced by the BBC and could in itself introduce inefficiencies given the costs of administering a contestable fund. In addition, the contestable licence fee fund could potentially reduce the BBC’s public sector broadcasting provision and dilute its accountability.

A White Paper, published by DCMS in May 2016, instead outlined plans to create a new contestable content fund from Exchequer revenue rather than from licence fee income.

Frontier regularly advises media organisations across Europe and globally on policy development, funding decisions and innovation.

For further information, please contact media@frontier-economics.com or call +44 (0) 20 7031 7000.