Funding
The Wireless Telegraphy Act of 1904 instituted government regulation of radio broadcasting and reception under the authority of the Postmaster General. A licence scheme was introduced whereby anyone wishing to purchase or construct radio equipment was required to obtain a licence from the Post Office. With the founding of the BBC, the radio licence fees became its principal means of funding. The household radio licence was eventually abolished in 1971 but a licence is still required for television reception.
Today each household (with exemptions for the elderly and others, paid for by the Department for Culture, Media and Sport) or business in the UK using a television or other equipment to receive broadcasts has to buy an annual television licence. The licence fees are set by the government but collected by independent contractors, Capita and AMV. The fees are to ensure that the BBC is sufficiently funded to provide for the British public high quality and diverse media content designed to "educate, inform and entertain" as per the remit of its charter. Because of this unique funding method, BBC radio and television output has been free of the constraints of commercial advertisers; programme makers are, in theory, answerable only to the licence payer, but pressure from political parties via appointments to the board of governors and by threats over changes to the amount of the licence fee as well as competition with commercial television channels for audience share are still significant factors in the corporation's output. The BBC has also for many years received funding from British Government departments for certain sections of its output. For instance the World Service, which, as its name suggests, is broadcast around the world, is funded by the Foreign and Commonwealth Office. In recent years the BBC has also received large amounts of revenue from its commercial wing, particularly by exploiting its massive back catalogue of programmes.
The 2003 Annual report gave revenue sources in millions of:
- £2,659m licence fees collected from consumers.
- £147m from BBC Commercial Holdings Ltd.
- £223.7m from the World Service, of which £201m is from grants (primarily funded by the Foreign and Commonwealth Office), £16.1m from subscriptions and £6.6m from other sources.
- Assorted additional sources such as property and interest.