The committee said there were “considerable challenges” for the BBC and warned that the current TV licence fee is “outdated and no longer fit for purpose”.
Currently, about 94% of individuals use the BBC each month but only 80% of households pay for a TV licence, the MPs noted.
“The licence fee should be reformed so it is no longer linked to the consumption of live TV or to a particular device, such as a television set,” the committee said.
“This should be an easier sell to licence fee payers if expanding the base is paired with a drop in the individual cost.”
The BBC’s director-general Matt Brittin has previously described the current licence fee model as “a busted flush” and “yesterday’s model”, and has said the price could be cut if more people pay under an overhauled system.
The committee also suggested the BBC should:
Explore the opportunity for introducing an international TV licence so it can increase its revenue and global audience
Work with independent production companies who own the rights to many of its programmes to ensure more remain on iPlayer
Develop its current premises with facilities that can “harness the potential of new media and support the creator economy”
The committee suggested the government should:
Support the corporation by legislating to put a BBC button on remote controls for smart TVs
Press YouTube to give a certain level of prominence for content made by the BBC and other British public service broadcasters
Take back full funding for the BBC World Service, describing it as “the UK’s number one soft power asset”
The committee supported opening up BBC iPlayer to shows from other public service broadcasters such as Channel 4.
Earlier this week, Channel 4 chief executive Priya Dogra said, external she was open to her network’s content being hosted on iPlayer.
The report also called for the end of political appointments to the BBC board, to improve governance and remain trusted by the public.
And the committee recommended that the BBC is given new public purposes relating to innovation and technology and combating misinformation and disinformation.
The BBC welcomed the report, which it said made “some important and interesting recommendations on the future of the BBC”.
A BBC spokesperson said: “We have consistently argued that the current funding model is outdated and needs reform, so we welcome the Committee’s support for maintaining universal funding while overhauling the licence fee.
“We are also pleased to see their recognition of the vital work of the World Service, with a clear recommendation that responsibility for funding should return fully to Government.
“At a time of huge disruption in the media, the BBC’s trust, reach and creative strength remain unparalleled. But we also recognise the need to evolve and move faster towards the future.”
The government’s Department for Digital, Culture, Media and Sport (DCMS) said it “agrees entirely with the Committee’s conclusion that it is in the country’s best interests for the next Charter to support an ambitious and innovative BBC, and that the corporation cannot be left to a future of managed decline”.
A DCMS spokesperson added: “We will review and consider the committee’s recommendations in detail, alongside the views of the public and other stakeholders, to inform decisions for the next Royal Charter.”
