While reading I thought, "for sure we will get to the part of the article where the British realized their folly and discontinued the licensing." But that part never came. Brits: is this for real, does this still exist? Do you pay a license to use your TV? Is it only for OTA programming or using the device in general?
You need a licence for any device that you watch live tv as it's broadcast. You need a licence to watch live tv, no matter where it's broadcast from.
The wording of the law says "installed or used to receive", so in theory you need a licence if you have eg a tv plugged into an aerial. They don't prosecute those cases any more.
You don't need a licence if you're not watching live tv. So you can watch all the ITV, Channel 4, Channel 5 catchup as much as you like. Or netflix, amazon, HBO, etc services.
People pay for it because the BBC is generally pretty good. It's stuck in a weird political landscape where some MPs want the BBC to be independent and not be funded by a licence fee, but those same MPs refuse to allow the BBC to operate commercially.
A longer term plan for the BBC would be welcome, and that's probably going to be a subscription service at some point.