Twenty years ago Blockbuster, the then heavyweight of video rentals, turned down a £38million merger offer from Netflix.

Today Netflix is worth £50billion, 1,300 times its offer to Blockbuster – which has gone from 3,000 stores to a museum in Oregon, for people who want to remember what video cassettes look like.

Netflix now competes with the likes of Amazon, Google and Apple for dominance of the multi-billion-dollar streaming market.

The BBC is a cherished British institution. Look at the incredible public response to this year's Gavin and Stacey Christmas Special. (Stock image)

The result is that people now spend three times as much time watching subscription services such as Netflix than they do BBC iPlayer.

More children now recognise the names Netflix and YouTube than they do the BBC.

I believe, no matter how well-funded these international streaming giants are, UK public service broadcasters are vital.

We need our national broadcasters to bring people together, to reflect our common values, and to showcase these values to the world.

As the Prime Minister said last week, the BBC is a cherished British institution. Look at the incredible public response to this year's Gavin and Stacey Christmas Special. It was the most-watched TV comedy for 17 years.

Then there is the breadth of its output – from radio and TV to podcasts and online. But the pace of change is fast. Broadcasters which do not remain relevant will find themselves left behind by viewers.

So we need to think carefully about how the BBC – and indeed public service broadcasting more generally – can stay relevant in the years ahead.

As we move into an increasingly digital age, where there are more and more channels to watch and platforms to choose from, it is clear that many people consider it an anachronism that you can be imprisoned effectively for not paying for your TV licence.

Netflix is worth £50billion, 1,300 times its offer to Blockbuster – which has gone from 3,000 stores to a museum in Oregon. (Stock image)

Decriminalisation of TV licence evasion was previously looked at by David Perry QC.

It has now been five years since the Perry Review, when a TV licence wasn't required to watch or download content on BBC iPlayer.

The Daily Mail has shone a spotlight on concerns over the way the licence fee is collected. And there remains legitimate concerns that the criminal sanction for TV licence fee evasion is unfair and disproportionate.

And after the BBC's decision to drop free TV licences for all over-75s from June, we're disappointed some vulnerable people in the UK will be liable to pay for the first time since 1999.

So we are today launching a public consultation on whether to decriminalise TV licence evasion, making it a civil rather than a criminal offence.

We'll also announce a new payment plan to allow people who struggle to pay the licence fee to spread out their payments evenly.

We will closely consider the impact it could have on the BBC, as well as the British people who pay for the BBC.

Accountability and value for money for taxpayers must be at the heart of how the BBC is funded. That's why we have made the BBC be more transparent about what it pays its highest-earning stars.

Our mission is to help public service broadcasters be better prepared to meet the challenges of the digital age.

We make no apology for being bold and ambitious. As the world around us changes, our laws must change too. It will require the BBC to be innovative and to move with the times.

We don't want a beacon of British values and world-class entertainment ending up like Blockbuster.

Culture Secretary Nicky Morgan warns BBC could end up defunct like Blockbuster Video if bosses don't keep pace with consumer demand

By Jason Groves and Paul Revoir for The Daily Mail

The first step towards scrapping the licence fee will be taken today – as a minister warns that the BBC could become defunct like the Blockbuster video chain unless it moves with the times.

In a major statement of intent, Culture Secretary Nicky Morgan will unveil plans to decriminalise non-payment, ending the controversial system that clogs up the courts and leads to some people being jailed.

The BBC opposes the move, which it warns will cost it £200million a year.

It comes after Boris Johnson said during the election campaign that he was 'looking at' scrapping the licence fee.

Government sources last night insisted ministers were not yet currently considering axing the £157.50 charge outright.

Culture Secretary Nicky Morgan will unveil plans to decriminalise non-payment of the licence fee

But writing in the Daily Mail today, Baroness Morgan warns the corporation it could face the same fate as Blockbuster, which has disappeared from the high street after failing to keep pace with consumer demand.

'It is clear that many people consider it an anachronism that you can be imprisoned effectively for not paying for your TV licence,' she writes.

'We need to think carefully about how the BBC... can stay relevant in the years ahead.'

She also announces plans for a flexible payment plan to ease the burden on the over-75s, who now face having to pay following the BBC's decision to renege on a deal with the Government to continue funding free licences.

Wiped out by streaming giants In 2013 it was announced that all remaining Blockbuster stores would be closed It is the story of a film rental giant wiped out by the success of streaming sites: where 9,000 Blockbusters once stood, just a single store remains. Considered a staple of its time, the very first shop opened its doors to customers in Texas in 1985. Rapid growth saw three major investors pump $18.5 billion into the video rental business in 1987. In 1992 Blockbuster expanded overseas and bought out UK rental-chain Ritz. It was purchased by Viacom in 1994 – but trouble was on the horizon. Forbes said Blockbuster lost 75 per cent of its value between 2003 and 2005. And in 2010 the company filed for bankruptcy and a year later Dish Network bought it in an attempt to keep 600 stores open. In 2013 it announced all remaining stores would be closed for good. Advertisement

Every household with a TV set has to buy a licence, whether or not they use BBC services.

Failure to pay can result in court action, leading to a fine of up to £1,000. Ultimately, those who fail to pay can face jail.

In 2018, more than 121,000 people were convicted and sentenced for licence fee evasion and issued with fines averaging £176. According to the Department for Digital, Media and Sport (DCMS), five people were jailed for an average of 19 days.

Last year there were about 26million active TV licences in the UK, generating an income of £3.69billion for the BBC.

Any move to decriminalise fee evasion will not come into effect until April 2022, according to the DCMS.

A spokesman said: 'The consultation does not ask for views on any other changes to the TV licence, and is clear decriminalisation of TV licence fee evasion would have an impact on BBC funding.

'If the Government decides to take it forward, it will consider the impact of it in the context of the overall licence fee settlement, with negotiations beginning later this year.'

Last week, Match Of The Day host Gary Lineker said buying a licence should not be compulsory.

He claimed if you made purchasing optional, 'you would lose some people, but at the same time you'd up the price a bit'.

Julian Knight, newly elected Tory chairman of the Commons culture, media and sport committee, said decriminalising the licence fee would mark 'a significant shift in the broadcasting landscape, with major implications for the future of the BBC'.

Twenty years ago Blockbuster, the then heavyweight of video rentals, turned down a £38million merger offer from Netflix

He said: 'With negotiations on its funding due to start later this year, there's a need for an urgent and open conversation about how people consume media and how they should pay for it.'

Last night, a BBC spokesman said a review five years ago had rejected the case for change.

The spokesman added: 'Of course it is important that any system commands public respect and we hope that any debate about the future is based on the evidence.

'If there are changes, they must be fair to law-abiding licence fee payers and delivered in a way that doesn't fundamentally undermine the BBC's ability to deliver the services they love.'