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Last Updated: Monday, 27 November 2006, 06:07 GMT
Will digital destroy the TV licence?
Dot Cotton played by June Brown
Highlights of EastEnders episodes can now be watched online
The digital era means more choice for TV viewers - but for broadcasters, it means more competition and declining ratings.

The BBC's licence fee is secure for the next few years - but will the public still be prepared to pay the TV licence in a fully digital world?

At the end of the 1980s, there were just four UK TV channels available and the BBC had 50% of the audience share.

Just over 15 years on, around 70% of homes have access to digital TV, with hundreds of channels to choose from, while online and mobile video are coming up on the rails.

In 2005, the audience share for the two main BBC channels was down to 33%.

So as choice continues to grow and viewers drift to other services, can the corporation continue to justify a compulsory licence?

Matt Lucas and David Walliams in Little Britain
Comedy Little Britain has been a ratings winner for the BBC
The BBC's head of new media and technology Ashley Highfield unsurprisingly believes it can.

"Yes - if we carry on making good programmes, we get those programmes out to people, they can find them and they associate the programmes with the BBC," he says.

The BBC has just been granted a new royal charter, which has secured the licence fee for the next 10 years. But the government will start to review alternative ways of funding - such as subscriptions - before that time is up.

"There's a lot more we have to do in this future world," Mr Highfield says.

"We can't just schedule, package and promote our linear channels if a lot of consumption is coming from elsewhere - off YouTube or the MySpaces or Bebos of the future," he adds.

And the BBC will have to find out more about what its "customers" want, he says.

In the medium and maybe long term, I would have thought the value of a public service provider just increases
Tim Hincks
Endemol UK
The corporation has been making moves to stay relevant, with digital-only TV channels and radio stations, putting its existing radio stations online and creating a strong web presence.

And its TV channels and shows will go online next year if the planned iPlayer gets the green light from the BBC Trust.

But will that be enough to entice the younger generation to read, watch and listen to the BBC when there is so much more choice?

"The answer really is down to content and yes I think people will pay for content," says Claudia Rosencrantz, head of Living TV.

"And I think it's how that licence fee is sold in the future as to whether it is a guaranteed supply of terrific content, in which case, I think people would pay for it," she adds.

Freema Agyeman and David Tennant star in Doctor Who
Doctor Who is repeated on digital channel BBC Three
Tim Hincks, creative director of Big Brother producers Endemol UK, says: "Nothing lasts forever, but I think in the medium and maybe long term, I would have thought the value of a public service provider just increases.

"It just becomes something you might feel more and more grateful for.

"That's partly because the BBC has this ability, which is not without controversy, to be at the cutting edge of technology and delivery."

But David Graham, who runs a media analysis firm, believes this is the beginning of the end for the TV licence.

In 2004, Mr Graham was part of a panel, run by former Channel 5 chief executive David Elstein, that called for the licence fee to be scrapped.

I resent being forced to pay for a service that I don't value
Jonathan Miller, journalist
"I think an ordinary person, particularly the younger generation who are used to accessing content all over the place and not relying on the BBC, are going to be the generation probably that gets harder and harder to get a licence fee from," he says.

"If it [the BBC] is going to depend on the licence fee for the totality of its production funding, and it's determined to do that exclusively, I can't see that as a very good long term strategy."

One of the most vocal opponents of the licence fee has been journalist Jonathan Miller, who has said it contravenes the European Convention on Human Rights.

"I resent being forced to pay for a service that I don't value", he says.

If the service was "truly loved by the public, the BBC should not have a problem with going to subscription", he believes.


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