A cross-party parliamentary committee has called on the BBC to stop spending excessively on international hit shows such as Suits and Schitt's Creek.
The Culture and Media Committee urged the public broadcaster to overhaul its funding model to avoid a trajectory of managed decline.
In a wide-ranging report on the broadcaster's future, lawmakers noted that while the network brings immense societal value, acquiring rights in bidding wars against commercial UK broadcasters fails to provide value for licence fee payers.
Rights for titles like Scooby Doo were acquired following the expiration of previous streaming contracts.
Committee members highlighted that 94% of individuals consume BBC content monthly, yet only 80% of households pay the annual television licence fee.
The report called for decoupling the fee from live TV consumption and specific physical devices, suggesting that broadening the paying base could lower individual costs.
Committee Chair: A Pivotal Moment for the BBC
Dame Caroline Dinenage, Committee chair, described the situation as "a pivotal moment for the BBC".
She emphasized the necessity of securing universal and sustainable funding while eliminating inefficient spending practices.
Dinenage said the BBC "must ensure the BBC has a universal and sustainable source of funding" and "can play its part by sweating its assets and boxing clever for the licence payer by ending illogical practices such as outbidding commercial rivals for overseas hits such as Suits, Schitt's Creek and Scooby Doo".
Addressing broader financial pressures, the committee urged systematic reform before the current charter expires.
The committee stated: "At a time of constrained resources, the BBC should not be paying over the odds for overseas content, particularly when it's a bidding war against commercial UK broadcasters" and "did not believe that this provides value for money for the licence fee payer".
Despite criticizing acquisition strategies, the committee chair acknowledged the essential role the public broadcaster fulfills across the United Kingdom's creative ecosystem.
Dinenage said: "For all its faults, the BBC drives our creative economy, supports our democracy through media sovereignty, and delivers world-class entertainment and moments that bring us together" and "Like a much-loved family member, we may criticise and grumble about the BBC but we would miss it enormously if it were no longer here for us".
The report warned that the current payment mechanism has become obsolete given modern viewing habits across digital platforms, citing "considerable challenges" and describing the system as "outdated and no longer fit for purpose".
Lawmakers proposed restructuring the fee to make the transition more acceptable to the British public.
The committee said: "The licence fee should be reformed so it is no longer linked to the consumption of live TV or to a particular device, such as a television set" and "This should be an easier sell to licence fee payers if expanding the base is paired with a drop in the individual cost".
BBC Response and Government Review
In response to the committee's findings, the broadcaster defended its programming acquisitions and welcomed recommendations regarding its long-term funding framework.
BBC Director-General Matt Brittin referred to the current model as "a busted flush" and "yesterday's model".
BBC representatives noted that less than 5% of its total content budget is allocated to foreign acquisitions, asserting that acquired titles attract audiences who subsequently discover original British productions.
A BBC spokesperson said: "some important and interesting recommendations on the future of the BBC" and "We have consistently argued that the current funding model is outdated and needs reform, so we welcome the Committee's support for maintaining universal funding while overhauling the licence fee".
The broadcaster also supported proposals calling for the UK government to resume full financial responsibility for funding the BBC World Service.
The spokesperson added: "We are also pleased to see their recognition of the vital work of the World Service, with a clear recommendation that responsibility for funding should return fully to Government" and "At a time of huge disruption in the media, the BBC's trust, reach and creative strength remain unparalleled.
But we also recognise the need to evolve and move faster towards the future".
Government officials confirmed they will review the findings ahead of negotiations for the next Royal Charter, which takes effect in 2028.
A Department for Digital, Culture, Media and Sport spokesperson said: "agrees entirely with the Committee's conclusion that it is in the country's best interests for the next Charter to support an ambitious and innovative BBC, and that the corporation cannot be left to a future of managed decline" and "We will review and consider the committee's recommendations in detail, alongside the views of the public and other stakeholders, to inform decisions for the next Royal Charter".
