Something needs to be done.
If revenues fall drastically, the quality of BBC output will plummet. Yes people can argue it already has, but it would definitely get a LOT worse.
On Demand is the future of television for all but news, and even news is now being replaced by some with social media. Maybe not a trustworthy source a lot of the time, but it's not stopping people.
Those On Demand shows still need to be funded.
I'm actually quite surprised anyone thought that on demand content from the BBC shouldn't be treated the same as Live TV, with the relevant terms/laws revised as necessary.