Half a million households cancelled their BBC licence fee last year, figures included in the corporation’s annual report show.
The total number of British households paying the £169.50 licence fee fell to 23.9 million, suggesting a growing number of people feel able to go without BBC services.
Younger audiences, in particular, are drifting away to Netflix and YouTube, with just 69 per cent of Britons aged under 16 saying they consumed any BBC content in an average week.
Those rates become weaker among people from an ethnic minority background and children under the age of seven, with the BBC noting that it is struggling to compete against “global media companies” for these crucial future viewers.
The corporation has until the end of 2027 to reach a new funding deal with the government.
It remains to be seen whether it will seek to maintain the existing licence fee model or follow the lead of many other countries and replace it with a different form of public funding, such as a levy on household bills, direct national funding, or a partial subscription.
The prime minister, Keir Starmer, and the new culture secretary, Lisa Nandy, have expressed broad support for public funding of the BBC, unlike the previous government which vowed to abolish the licence fee.
The BBC chair, Samir Shah, said the financial challenge was stark: “Over the last 10 years we’ve lost 30 per cent of our income.”
He added that the BBC would be considering whether non-payment of the licence fee should continue to be a criminal offence. “One of the elements will be the issue of enforcement and sanction and what is the best way to do that,” he said.
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