An alternative means of funding the BBC will "eventually" have to be looked at, the culture minister has said.
John Whittingdale told MPs that the licence fee model is guaranteed until 2027.
The "justification that everybody benefits from paying it because everybody benefited from the BBC is still largely the case, but that will diminish over time", he said.
"I suspect that eventually, we will need to look at alternative methods of funding the BBC," he told the Digital, Culture, Media and Sport Committee.
Mr Whittingdale also said that decriminalising licence fee evasion would bring with it "potential negatives" and is a "more complicated matter than was originally perhaps suggested".
.@JWhittingdale says there are many aspects of licence fee he doesn't like – it's a flat charge, no means testing, highly regressive. The case that everyone benefits from BBC will diminish over time. Eventually we will need alternative means of funding.
— Digital, Culture, Media and Sport Committee (@CommonsDCMS) December 15, 2020
His comments come as the Government prepares to publish its response to a consultation on decriminalising licence fee evasion.
"It is clear that the alternatives do carry with them potential negatives as well... with higher fines and... bailiffs to knock on people's door, so we are of a view that this is a more complicated matter than was originally perhaps suggested," he said.
"We are certainly not going to rule it out. We will continue to keep it under review," he said.
Mr Whittingdale also defended the Culture Secretary's decision to write to Netflix about The Crown.
Oliver Dowden sent a letter over fears that viewers of the royal drama could mistake fiction for fact without a warning at the beginning of episodes.
Mr Whittingdale said that "most people are aware that dramatised accounts of real-life events inevitably require some speculation."
But he said: "These are events which are still quite raw and controversial, they involve people such as the existing Prince of Wales and his sons...
"It's not unhelpful to remind people... a reminder that this is not based on any insider knowledge but is a dramatisation of somebody's ... imagination as to what might have happened."
The minister said he is "entirely open minded" about privatising Channel 4 and that he is giving thought to the "future of all the public service broadcasters".
The Government has previously announced a panel to "help shape the future of the public broadcasting system and explore the reforms needed to make sure it is modern, sustainable and successful".