A senior Netflix executive has suggested that the BBC’s failure to charge for iPlayer has created a generation of people who have grown accustomed to getting TV for free.
Speaking in a piece published by The Telegraph, Ted Sarandos, Netflix’s chief content officer, said, “In the US they use the term ‘cord-cutting’."
“I think the more impactful one will be the ‘cord nevers’, you know, the generation that’s in high school and college today, that will likely never have pay TV and will probably not value the licence fee as much as others either.”
Licence fee free TV
Until the renewal of the Royal Charter the BBC was unable to monetise its on-demand iPlayer content.
Instead it was only able to limit its live content to TV Licence holders, meaning that it was essentially giving away its entire on-demand library for free, and now an entire generation has grown up viewing iPlayer content for free.
Now that the iPlayer loophole has been closed, this same generation may end up being unwilling to pay for its content, after having grown accustomed to getting it for free.
The risk is that the corporation is now on the back-foot compared to services such as Netflix, which has the advantage of being able to put its eggs in a few bigger baskets rather than having to spread them across multiple 24 hour channels and radio stations.
In other words, the Licence Fee is a much bigger package compared to Netflix.
These problems exist despite the BBC creating what Sarandos calls “one of the great innovations in television around the world” with the iPlayer platform.
The data certainly supports the idea that TV is failing to attract younger viewers. According to research from Enders Analysis the average age of BBC One and Two viewers is 62, and even the youth oriented channel E4 has an average viewing age of 42.
While similar data is not available for Netflix, it is most popular amongst 16-24 year olds in America, of which 65% subscribe, suggesting that it does not suffer from the same problem.