UK faces iPod, iPhone tax to fund broadcasting

iPod users in the UK face a tax intended to fund unprofitable shows from Channel 4 and ITV, Ofcom has announced.

Ofcom warned that by 2012, when every household in Britain will have access to more than the five basic channels, between £145 million and £235 million of public funding would be needed to ensure ITV, Channel 4 and Five could continue producing their current level of public service programmes.

To meet this need the broadcasting regulator is considering a tax to be levied on sales of iPods and other digital music players, satellite dishes, Freeview boxes and internet subscriptions. The cash raised would be used to fund so-called ‘public service’ shows on commercial TV, such as kid’s shows and news.

The tax could even extend to blank CDs and DVDs under the new proposals.

Other proposals in Ofcom’s report include direct taxation, which would see money go straight from the Government to broadcasters, and “top slicing”, which would force the BBC to share the £3.4 billion-a-year licence fee with other broadcasters.

Ofcom’s consultation closes on December 4. It will publish its final recommendations early next year, final decision rests with the UK government.

The regulator found that

-9 out of 10 people do not want the BBC to be the only provider of public service content in the future;
– audiences value highly PSB alternatives to complement the BBC. Three quarters of people are willing to pay on average up to £3.50 per month for PSB services on ITV, Channel 4 and five; and
– a majority of people want ITV1 to continue to provide regions and nations news to complement the BBC.

In this video, Ofcom Partner, Strategy and Market Developments, Peter Phillips, discusses the issues surrounding public service broadcasting.

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