BBC channels and radio stations face closure as a result of the licence fee freeze, according to Tim Davie, who said the decision will leave the corporation with a £285 million funding gap.
The BBC director-general refused to rule out the closure of BBC Two or Radio 5 Live, saying that output would have to be re-shaped and services could not be preserved in aspic.
The Government announced on Monday that the licence fee will be frozen at £159 until 2024 and then rise in line with inflation for the following four years.
Mr Davie said the settlement would amount to a £285 million funding gap by 2027-28. While the figure is likely to be lower in the preceding years, sources said the corporation estimates it will total around £1.5 billion over the six years remaining in this charter period.
“Inevitably, if you don’t have £285 million, you will get less services and less programmes,” he said.
‘We need to reshape for a digital age’
Appearing on BBC Radio 4’s Today programme, Mr Davie was asked if the existence of BBC Two, BBC Four and Radio 5 Live were “inevitably on the agenda”.
“Everything is on the agenda,” Mr Davie replied, suggesting that linear, or scheduled, television and radio could belong to the past.
“As an organisation we need to reshape ourselves for a digital age. The media market is moving extremely rapidly. I’m excited about re-engineering the BBC,” he said.
“iPlayer is doing brilliant business… so we’re not just going to put aspic around linear services or say we’re going to keep doing exactly the same thing. We need to re-shape the business.”
Mr Davie said he was “absolutely” clear that channels may disappear.
The closure of BBC Four, already reduced to a repeats channel, would be small beer, as its content budget is only £29 million per year.
Radio 5 Live’s annual budget is £44 million, while the budget for BBC Two is £261 million. BBC Three’s budget has been doubled to £80 million for its revival as a television channel.
All are dwarfed by the content budget for BBC One, which is close to £1 billion per year.
While BBC One will remain intact as the corporation’s flagship channel, it is expected to cut back on making expensive dramas and instead buy in shows from elsewhere. Around the World in 80 Days, the David Tennant series shown on BBC One at Christmas, was acquired from abroad.
“We are supporting households at a time when they need that support the most, and this settlement sends an important message about keeping costs down while also giving the BBC what it needs to deliver on its remit,” Ms Dorries said.
She also announced plans for a review of the BBC’s funding. Alternatives to the licence fee will be explored, including the transformation of the corporation into a Netflix-style subscription service. One option would be to retain a core, publicly-funded service including news, education and children’s programming, but charge for drama and entertainment.
Mr Davie said subscription could work financially, but would destroy the essence of the BBC.
“There are moments when the single commercial model appeals to people in the BBC, but the truth is we have built an incredibly creative industry here in the UK and we’ve got a universal broadcaster that is admired around that world, and that is because it serves the British public,” he said.
“Once you’re trying to service a subscription base and a commercial agenda, it is a completely different situation because suddenly you are doing things that are there to make profit, for a specific audience.”