The licence fee remains "the most appropriate funding model" for the BBC, and will increase in line with inflation until 2021/22, when there will be a new settlement, Culture secretary John Whittingdale has announced.
Viewers watching BBC programmes on demand online will be required to obtain a TV licence.
It is "likely to become less sustainable" in the longer term, he said.
Under-served minorities will have more programmes but iPlayer users without a license will have to pay to see their favourite shows.
The culture secretary's reforms will change the public broadcaster more than is widely thought - here's why.
The government has outlined White Paper changes to the corporation.