Television Licence Fee

Television Licence Fee, one of the four main methods of financing broadcasting services—the others are direct state funding, advertising (including sponsorship), and subscription.

A licence fee is a charge levied on receiving equipment for the purpose of financing a broadcasting service. A method of funding particularly identified with public service broadcasting, it was first applied to the British Broadcasting Company (BBC, later Corporation) when it came into existence in 1922. It remains the sole source of funding (apart from a relatively small amount of revenue from commercial subsidiaries) for the BBC's domestic services. Many other countries operate some form of licence-fee system, sometimes jointly with other methods.

The licence fee has been described as the “least worst” method of funding public service broadcasting. Among its disadvantages are that it is effectively a tax (and therefore unpopular); that it takes no account of ability to pay; and that it is liable to evasion. Its acceptability is increasingly in doubt as the choice of broadcast services financed by other means widens.

Arguments for the licence fee include that it is a secure source of income for a public service; that, by not being dependent on either the government or business, it protects the broadcaster from both political and commercial pressure; and that other methods of funding public service broadcasting are more seriously flawed.