I've no issue personally with the BBC licence. As has been mentioned, I just see it as fairly cheap tax to get a good, solid broadcasting service, for TV, Radio and Web. Loads of rubbish on BBC, but it caters for all sorts. A good amount I'll watch on it as well. Match of the Day, News, the odd series like Peaky Blinders, light entertainment like the Graham Norton Show, etc
If it was subscription only, I'd imagine it would get very few subscribers, just as I think it is less likely people will subscribe to such a wide ranging service, and more likely to invest in specific areas of interest, where that broadcaster then focuses their expenses in those areas?
They could bring in advertising, but then lack of advertising is one of the BBCs USPs. Furthermore, of all the advertising given to other individual broadcasters, I doubt there is that much to go around again to give to BBC. So, if BBC relied on advertising, I suspect it wouldn't get a lot and/or dilute the advertising for other broadcasters.
The media, in whatever form, is a pretty essential part of life. The BBC plays a huge part in that, especially as not everyone can afford the likes of Sky subscriptions. Getting more reliable, and hopefully less biased news is also a strength of the BBC (Heaven forbid many relied on social media). So, paying a tax for that seems reasonable to me. I don't think it is expensive, but that is subjective and a debate to be had