Labour ministers are considering plans to abolish the BBC licence fee and replace it with an £11-a-month charge collected through household internet bills.
Under the proposal, the existing £180 TV licence would be scrapped, with a new broadband levy introduced to fund the corporation instead.
That would mean every home with an internet connection contributing to BBC funding, regardless of whether anyone in the household watches live television.
The idea has been outlined in a report from the Social Market Foundation (SMF), which examined potential long-term options for financing the BBC.
The think tank also proposed turning the broadcaster into a John Lewis-style mutual organisation. Under that model, BBC “members” could elect or join a council tasked with scrutinising senior executives and holding them to account.
The debate comes as 3.7 million households say they do not require a TV licence because they do not watch live broadcasts.
During 2025, a further 500,000 UK households stopped paying the charge, contributing to an estimated £500 million in BBC cuts.
The SMF warned that popular programmes, including Sir David Attenborough’s Planet Earth and The Traitors, could be at risk if the broadcaster’s funding model is not overhauled.
More than half of the 2,050 people questioned for the report said they feared Strictly Come Dancing could also disappear if the BBC fails to address its worsening financial position.
Popular programmes including Strictly Come Dancing (pictured: hosts Josh Widdicombe, Emma Willis and Johannes Radebe) and The Traitors could be threatened if the BBC fails to close its funding gap
Labour ministers are considering replacing the licence fee with an £11-a-month internet charge. BBC director-general Matt Brittin (pictured) has backed a household levy collected in a similar way to a utility bill
The report estimated that approximately 63 per cent of BBC content could disappear if licence fee funding were removed.
Any remaining programmes and services could then be moved to a separate streaming platform or made available only behind a subscription paywall, it said.
Critics have warned that low-income households could bear the greatest burden under a broadband-based system. The SMF said a social tariff discount could be introduced to help protect poorer families.
A second proposal would retain the licence fee while adding a smaller £2.30 monthly “News and Culture Levy” to internet bills.
Broadband providers would be reimbursed for the administrative costs involved in collecting the extra payments.
The future of the licence fee is expected to feature prominently in discussions over the BBC’s next Royal Charter, which will set out how the broadcaster is governed and funded for the following decade.
BBC leaders have repeatedly cautioned that further financial pressure could put thousands of jobs and a number of programmes at risk.
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In July, BBC director-general Matt Brittin said he was advocating a compulsory household levy to replace the current TV licence system.
Licence fee revenue has already fallen by more than £1 billion in real terms over the past decade.
Mr Brittin said the broadcaster is looking to recoup its finances, which are in ‘an unpredictable but downward spiral’.
‘We need universality, we need sufficiency,’ he added.
A household levy would mean everyone pays a mandatory fee to the BBC regardless of whether people watch or listen to its programmes.
The charge could be levied alongside utility bills, those backing the plan say, similarly to the German model known as the Rundfunkbeitrag.
German households pay a compulsory €18.36 per month (£15.70) to fund the nation’s TV and radio.
Mr Brittin, 58, previously argued for a possible household levy at the House of Lords Communications and Digital Committee as part of the BBC charter review.
‘It’s very, very hard to run an organisation that can attract the best creative, journalistic and technical people if you’re going to have to cut costs every year,’ he said.
The new Director-General has previously described the licence fee model as a ‘busted flush’ which is ‘no longer fit for purpose’.
Mr Brittin also floated the idea of introducing a ‘streaming levy’, which would expand the scope of the licence fee to include anyone who watches content on Netflix, YouTube, TikTok or other types of internet video streaming.
He suggested MPs consider possible concessions for young people and low-income households in paying the fee.
‘The BBC is being held back by the straitjacket of the licence fee mechanism. It’s a model that ties us to the past when audiences are already living in the future,’ Mr Brittin said.
‘So, we urgently need a solution that will provide sustainable, sufficient and universal funding.’
A Department for Culture, Media and Sport spokesman said: ‘The BBC must be funded by a model that is sustainable and fair to all those that are paying it.
‘Through Charter Review, we are looking at a range of options, including how the BBC can operate more efficiently, generate more commercial revenue, and how the licence fee could be reformed.’
It is understood that decisions regarding BBC funding will be set out in an upcoming White Paper.