Why Should We Pay For Traditional TV?
As various media platforms available to viewers such as OTT and YouTube platforms are preferred at the moment, more discussions are being made on the need for a traditional fee model. In fact, researches regarding this have been conducted in the UK. According to the study, in the UK, the 2019 standard reception fee is about £154.5 (USD 214) per year, but the fee avoidance rate in UK is also rising. The avoidance rate, which was around 5 percent between 2010 and 2014, was the highest at 7.25 percent in 2020.
In a report by Offcom, a UK’s communications regulator, it analyzed the impact of converting the British public broadcaster BBC into a total of three models: advertising, subscription and hybrid.
Considering the BBC's market share (32% TV and 49% radio) for advertised models, revenue would be inevitably reduced. Another thing to point out in this report is that the BBC's conversion to an advertising model could lead to worsening advertising revenue for other broadcasters.
Second, there is a way to convert public broadcasting into a subscription model like Netflix. However, at this time, the meaning of "public" broadcasting is tarnished, so the feasibility is low. When it is converted to a subscription model, sales profit will also drop significantly, considering the household penetration rate of Subscription Video On Demand (SVoD, 47%)
Finally, the report was studied when the BBC adopted a hybrid model that provides some of the content as free services and some as paid services. If major channels such as BBC One and iPlayer services are provided as basic services and other channels or some content are provided by subscription services, there is a high possibility that the demand for subscription will drop sharply.
Current viewers, who consist of a generation that compares OTT subscription models such as Netflix with reception fee models, say they are only willing to pay for experiences that they enjoy and recognize. It is expected that the time for content platforms is approaching to meet the conditions of increasing viewers' willingness to pay and reconsidering the value of media.