The BBC is established under a Royal Charter and operates under its Agreement with the Secretary of State for Culture, Media and Sport. Its work is funded principally by an annual television licence fee which is charged to all British households, companies, and organisations using any type of equipment to receive or record live television broadcasts and iPlayer catch-up. The fee is set by the British Government, agreed by Parliament, and used to fund the BBC's radio, TV, and online services covering the nations and regions of the UK. Since 1 April 2014, it has also funded the BBC World Service (launched in 1932 as the BBC Empire Service), which broadcasts in 28 languages and provides comprehensive TV, radio, and online services in Arabic and Persian.
Around a quarter of BBC revenues come from its commercial arm BBC Studios Ltd (formerly BBC Worldwide), which sells BBC programmes and services internationally and also distributes the BBC's international 24-hour English-language news services BBC World News, and from BBC.com, provided by BBC Global News Ltd.
From its inception, through the Second World War (where its broadcasts helped to unite the nation), to the 21st century, the BBC has played a prominent role in British culture. It has also been known as “The Beeb”, and “Auntie”.
Britain's first live public broadcast from the Marconi factory in Chelmsford took place in June 1920. It was sponsored by the Daily Mail's Lord Northcliffe and featured the famous Australian soprano Dame Nellie Melba. The Melba broadcast caught the people's imagination and marked a turning point in the British public's attitude to radio. However, this public enthusiasm was not shared in official circles where such broadcasts were held to interfere with important military and civil communications. By late 1920, pressure from these quarters and uneasiness among the staff of the licensing authority, the General Post Office (GPO), was sufficient to lead to a ban on further Chelmsford broadcasts.
But by 1922, the GPO had received nearly 100 broadcast licence requests and moved to rescind its ban in the wake of a petition by 63 wireless societies with over 3,000 members. Anxious to avoid the same chaotic expansion experienced in the United States, the GPO proposed that it would issue a single broadcasting licence to a company jointly owned by a consortium of leading wireless receiver manufactures, to be known as the British Broadcasting Company Ltd. John Reith, a Scottish Calvinist, was appointed its General Manager in December 1922 a few weeks after the company made its first official broadcast. The company was to be financed by a royalty on the sale of BBC wireless receiving sets from approved manufacturers. To this day, the BBC aims to follow the Reithian directive to "inform, educate and entertain".