Agenda
Introduction
Findings
- Overall value
- Digital services
- Genres
- Subscription
The final study
• 2350 respondents
• Nationally representative
• Supplemented by qualitative research
• 19 pilots for development
The aim was to measure the value of the BBC for
people as individuals and the country as a whole
Total Value of
the BBC
=
Consumer Value
+
Citizen Value
We started with willingness to pay
Gabor-Granger
Conjoint
Willingness to pay has several limitations
•
Not the most appropriate performance indicator
for the BBC
- Useful for Sky
- It doesn’t capture the externalities
•
There are research effects
- Respondents don’t believe that the BBC will
be taken away
- They resent the idea that the BBC will be
taken away
- They think they pay for it through Sky
anyway
So what other performance indicators are useful?
• Non-normalised chip allocation
- Perhaps less dependent on affluence
- Can be used to estimate value to
individuals or society as a whole
• National Voting question
- Addresses respondents as democratic
agents
- Captures perceived externalities
These methods allowed us to measure value on a
top-down and bottom-up basis
Consumer Value
Total Value
Gabor-Granger
National Voting
Non-normalised
chip allocation
Non-normalised
chip allocation
TOP
DOWN
BOTTOM
UP
Top-down and bottom-up methods have these
pros and cons
• The top-down method shows how people really
would react:
- as democratic agents when policy has
changed or
- as consumers if the BBC were offered as a
subscription service
• But it may not capture the full value that people
derive from the BBC’s services
• The bottom-up method removes any gap that
might exist because of a lack of awareness
Overall findings
Monthly total value of
the BBC
(sum of consumer value
and citizen value)
Monthly
consumer value
of the BBC
Top down
(value of BBC as a whole)
£20.70
£18.35
Bottom-up
(value of BBC calculated
as the sum of its
constituent services)
£23.50
£18.70
Agenda
Introduction
Findings
- Overall value
- Digital services
- Genres
- Subscription
Finding 1
There is overwhelming support for the
licence fee. 81% of the population think
the BBC is worth its current cost and on
average people think it is worth twice
what they pay.
81% of “total value respondents” think the BBC is
worth the licence fee
Proportion willing to pay
100
Citizens
92 92
90
Consumers
81
% willing to pay
80
Proportion willing to
pay £10:
Citizens:
81.0%
Consumers: 76.0%
76
70
60
60
53
50
42
40
32
30
19
20
16
9
10
0
5
10
15
20
30
Monthly price (£)
6
40
6
3
50
4
2
60
On average people are willing to pay more than
twice the current rate of the licence fee
Demand curve for the aggregate value of the BBC
Citizens
Monthly price (£)
70
60
490,000
Consumers
Equivalent monthly fee:
980,000
Citizens:
£20.70
Consumers:
£18.35
Current Licence Fee: £10.00
1,470,000
50
735,000
2,205,000
40
1,470,000
4,655,000
30
3,920,000
10,290,000
20
Current Licence
12,985,000
10
0
14,700,000
7,840,000
18,620,000
19,845,000
Fee: £10 per
22,540,000
22,540,000
0
5,000,000
10,000,000
15,000,000
20,000,000
Number of UK households
month
25,000,000
There are two groups of non-payers
Citizens NOT willing to pay:
25%
25%
19% NOT WTP £10
20%
15%
10%
Consumers NOT willing to pay:
11% WTP £5
but NOT £10
20%
5%
5%
0%
0%
£5
£10
16% WTP £5
but NOT £10
15%
10%
8% not WTP £5
24% NOT WTP £10
8% not WTP £5
£5
£10
Those willing to pay £5 but not £10 tend to be
multichannel families
Citizens and Consumers NOT willing to pay £10
24% NOT WTP £10
Age:
Middle-aged
(30-49 skew)
19% NOT WTP £10
16% WTP £5
but NOT £10
Gender: Male
SEG:
Region:
Less well-off
(C2DE Skew)
Age:
11% WTP £5
but NOT £10
Gender: No gender skew
SEG:
Skew to Wales &
NI
Middle-aged
(30-49 skew)
Region:
Less well-off
(C2DE Skew)
Skew to Scotland
& NI
MC
With
Access: multichannel
MC
With
Access: multichannel
Citizens
Consumers
The 8% who are “Refuseniks” tend to be male,
downmarket and more likely to live in Scotland
and Northern Ireland
Citizens and Consumers NOT willing to pay £5
Age:
Older
(50-64 skew)
Age:
Gender: Male
Gender: Male
SEG:
Less well-off (DE
Skew)
Region: Skew to Scotland
Region:
Skew to Scotland
& NI
MC
Without
Access: multichannel
MC
Without
Access: multichannel
SEG:
Less well-off (DE
Skew)
30-64
8% not WTP £5
Citizens
8% not WTP £5
Consumers
Agenda
Introduction
Findings
- Overall value
- Digital services
- Genres
- Subscription
Finding 2
The BBC’s digital services are
valued very highly.
BBC’s digital services are valued highly
Value of BBC services for citizens and consumers
£ per month 25
Total = £23.50
1.80
20
2.70
Total = £18.70
1.00
1.70
1.20
BBCi (online and interactive)
BBC Local Radio
BBC Digital Radio
2.70
BBC National Analogue Radio
3.20
BBC Digital TV Channels
4.00
3.50
BBC Two
5.70
5.40
BBC One
Citizens
Consumers
1.80
15
Current
Licence Fee: 10
£10 per month
3.60
3.90
5
0
The digital services when compared to their costs
deliver high value
Value of BBC services compared to costs
Citizens
Consumers
BBC One
4.00
1.45
BBC Digital TV
Channels
3.90
3.20
3.60
0.99
2.70
1.80
BBC Digital Radio
0.00
3.50
0.90
BBC National
Analogue Radio
BBCi
5.70
5.40
3.36
BBC Two
BBC Local Radio
Cost of delivering service
1.20
2.70
0.61
1.70
1.80
0.40
1.00
1.00
2.00
3.00
4.00
£ per month
5.00
6.00
The low cost base of the digital television
channels mean that they generate a high value
yield
Individual service values compared to costs
Citizens
Consumers
Cost of delivering service
0.61
BBC Three
0.32
0.50
0.55
BBC Four
0.17
0.45
0.77
CBBC
0.18*
0.63
0.80
Cbeebies
0.18*
0.66
0.77
BBC News 24
0.11
0.63
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90
£ per month
* Combined cost for children’s channels (CBBC
and Cbeebies)
Agenda
Introduction
Findings
- Overall value
- Digital services
- Genres
- Subscription
Finding 3
News, soaps, British drama and
British comedy are all perceived to
be important public service genres
News, regional news and home-produced
programmes were genres that were ranked most
important
“Total value” respondents
Genre ranking
News
28.4
Regional News
24.7
“Consumer value” respondents
Genre ranking
22.1
News
19.6
Regional News
Wildlife
15.1
Soaps
Current affairs
14.5
Blockbuster Movies
Soaps
14.5
British Comedy
14.6
17.9
15.3
Education
13.3
Wildlife
14.4
Consumer programmes
12.7
US Films
14.0
British Comedy
12.2
British Films
13.9
Football
12.0
British Drama
British Films
11.5
Football
0 5 10 15 20 25 30
Average ranking score
(out of 38)
12.7
11.9
0
5
10 15 20 25
Average ranking score
(out of 38)
30
The high correlation between both groups shows
that public service can include a wider variety of
genres
Citizen ranking score of most important
Comparison of ranking scores between citizens and consumers
30.00
News
25.00
Regional News
20.00
15.00
Current affairs
Education
Wildlife
Soaps
Consumer programmes
Football
British Comedy
British Films
Science History
Sport
Other local
Blockbuster Movies
British Drama
programmes
US Films
Gardening
Investigative
Period Drama Home & DIY
programmes
Chat
shows
Politics
Food & Cookery
Quiz Shows
Classical
US Comedy
Arts music Children’s
Popular
music programmes
Animation
Business
Reality TV programmes
Religion
US Drama
Observational documentary
Children’s
Foreign Films
Live Action
Art house / independent films
10.00
5.00
0.00
0.00
5.00
10.00
15.00
20.00
25.00
Consumer ranking score of most important
30.00
Agenda
Introduction
Findings
- Overall value
- Digital services
- Genres
- Subscription
Finding 4
Subscription would have adverse
effects on both the BBC and its
audience, with an annual net welfare
loss of around £300 million, a revenue
loss of over £500 million and a loss of
its ability to deliver public purposes
Currently the BBC generates a consumer surplus
of over £2.5 billion
Consumer surplus
70
Monthly Price (£)
60
50
Annual net consumer
surplus: £2,597m
40
30
Annual consumer deficit:
£303.6m
20
A
10
B Current Licence
Fee: £10 per month
0
0
5
10
15
20
Number of UK households (millions)
25
The BBC would need to charge £13 per month if it
were a subscription service to maximise its
revenues
Amount of income earned if BBC were
a subscription service
Income (£)
3,000,000,000
Current BBC
Income
(£2.9 billion)
2,500,000,000
2,000,000,000
Equivalent monthly fee:
Revenue Maximising Price:
£13.00
Income:
£2.37bn
Number of HHs at £13:
15.2m
Drop in Income at
Maximising Price:
£522.7m
1,500,000,000
1,000,000,000
500,000,000
0
0
10
20
30
40
50
Monthly price (£)
60
70
At £13 per month the welfare loss would be
£300m
Net consumer welfare
70
Monthly Price (£)
60
50
40
-£532.8m
-£70.8m
£303.6m
30
Optimal subscription
price: £13 per month
20
10
C
Current Licence Fee:
£10 per month
B
D
0
0
5
10
15
20
Number of UK households (millions)
25
If the BBC were to offer different subscription
packages 58% of households would opt out
entirely
Service
package
BBC One
Monthly
subscription
price
Percentage of
consumers
who would
subscribe
Number of
households
Annual
revenue
£7
4%
0.9m
£75m
£9
17%
4.1m
£438m
BBC One +
BBC Two
BBC One +
BBC Two +
BBC digital
channels
Opt out of all
packages
£11
22%
5.5m
£719m
N/A
58%
14m
N/A
TOTAL
N/A
100%
24.5m
£1,232m
Conclusions
• Willingness to pay has a role but doesn’t
give the complete story
• The national voting question is a useful
addition
• On this occasion we could not find a way
to make conjoint work
• All the methods we used converged on
roughly the same answer
Conclusions
• There is overwhelming support for the
Licence Fee
• The BBC’s digital services are valued very
highly
• Subscription would have an adverse
impact on citizens, consumers and the
BBC’s finances
• News, soaps, British drama and British
comedy are all perceived to be important
PSB genres