BBC boss Tony Hall has launched a robust defence of the decision to join forces with ITV to launch a rival to US giant Netflix .
It is thought the service – called BritBox – will cost viewers around £5 a month and will feature British box-set favourites from Broadchurch to McMafia, as well as brand new shows.
But some critics have hit out at the BBC's decision to enter into partnership with ITV, as they already pay £150 a year for the licence fee.
If viewers sign up to the new service, BritBox could cost an extra £60 a year on top.
But writing in the Mirror today, director-general Lord Hall pledged his commitment to BBC content being available on its free iPlayer service for a year after it was aired.
And he defended the new, paid-for service saying it merely replaces the traditional ways of buying old shows on DVD or paying to download them.
Of the new service, he insisted: "None of this will replace what you get from the licence fee.
“You will always see BBC programmes on the BBC first and our ambition is BBC programmes will all be free on iPlayer for at least a whole year – so we are also transforming iPlayer into an even better service. Everybody wins."
ITV Hub would also continue after the launch of BritBox.
Lord Hall said the new service would be a big boost for the British TV industry, saying: "BritBox can help it thrive as investment in our industry grows."
The announcement of the new service – expected to launch in the UK in the second half of 2019 – sparked some anger yesterday from viewers.
Stuart Clennett, of Grimsby, Lincs, said: "I am very much looking forward to paying to watch old TV shows that I already paid for with my TV licence. Unbelievable."
David Bull added: "Is there going to be a cut in TV licence fee? We are paying for the BBC through the licence. Now they want us to pay again?"
But a BBC source said: "The reality is that in the old days of video or DVDs, people didn't make that argument. And they don't tend to when they watch BBC programmes on Netflix or elsewhere.
"In the old days, people just watched a show on the telly and that was it.
"They now get better value, especially as we're trying to extend the iPlayer window to at least a year."
Politicians also backed the new service. Labour 's Deputy Leader Tom Watson said: "This has been a difficult time for our public service broadcasters, with challenges from massive international companies like Netflix and Amazon Prime.
"ITV and the BBC produce some of the very best of British storytelling and it is right that they consider how they can continue to thrive in a world of ever-evolving technology."
And Lib Dem culture spokeswoman Baroness Jane Bonham-Carter said: "It's great that all the revenue from this new venture will be reinvested, creating more quality programming and British content.
"It's absolutely right that audiences should, for the first time, have the choice of subscribing to a service that has British content at its heart.
"Both the BBC and ITV recognise how audiences are accessing their content and have produced a product that will make this content more accessible to more people."
Yesterday, it emerged Channel 4 and Channel 5 are also in talks about joining the venture.
The plans have been unveiled 10 years after the Competition Commission vetoed a similar joint service, saying that British viewers "value" UK programmes and "do not regard other content as a good substitute".
Since then, global rivals such as Netflix and Amazon have made their mark on British homes and demonstrated an appetite for US shows.
ITV chief executive Carolyn McCall said BritBox would not be competing directly with Netflix, but would be "complementary".
She said: "Netflix is global… when we're creating content, we're creating it for the UK… We're not a substitute to Netflix – we're complementary to Netflix."
The service would be "very good for British creative industries, because we are putting more money into the British creative industry", she added.
Earlier she told BBC Radio 4's Today programme: "People in Britain really do want to see a place where there is a home for British content… It will be very distinctive because that actually doesn't exist in Britain today."
The BBC and ITV said they have enjoyed success with their BritBox streaming service in the US.
Talks on the new service have been taking place for more than a year.
A spokeswoman for broadcasting regulator Ofcom said: "We want to see broadcasters collaborating to keep pace with global players, by offering quality UK content that's available to viewers whenever and however they want to watch it."
Scamflix is Beeb’s way of making us pay twice
If there is a way of getting more cash out of viewers, the hard-nosed bosses of the BBC will find it, writes Paul Routledge.
This hook-up with ITV should be called Scamflix, a way to make profits from the huge archive financed by millions of licence-payers over decades.
It's an upside-down version of Hughie Green's Double Your Money – pay twice for the same programme that was on the box years ago.
Pensioners, especially those threatened with the confiscation of their over-75's free TV licence, will be hit yet again as they appreciate old films the most.
BBC iPlayer will continue to be free to licence-holders but for how long?
BritBox is a step towards total commercialisation of the nation's publicly funded broadcaster.
It doesn't have to be like this. Talking Pictures – Channel 81 on Freeview – gives a first-rate service of archive film. I'm an addict. Gideon? Dick Barton? Family at War? It's all there.
Like the old movies, this is a black-and-white argument. As with the NHS, you pay for it once, so you shouldn't have to go private.
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