BBC boss Tony Hall said he wants to extend the licence fee to cover people watching programmes on the iPlayer.
At the moment the £145.50 fee is payable by everyone in the UK who watches or records BBC programmes when they are shown - meaning the on-demand iPlayer is not included.
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Speaking at the Oxford Media Convention, Mr Hall said: "One of the advantages of the licence fee is that it's flexible and has adapted over the years. It started as a radio licence. Then TV. Then colour TV. And then the relatively simple change to the regulations in 2004 to cover the consumption of live TV on new devices such as computers. When it's adapted itself so well over the decades, why would you suddenly give it up?
"When and how best to take the next step is, of course, a matter for the Government. Our view is that there is room for modernisation so that the fee applies to the consumption of BBC TV programmes, whether live on BBC One or on-demand via the iPlayer."
Mr Hall also said the corporation had become more efficient, saying: "For example, in 2006 we employed 635 people in the BBC's core finance team. By 2016 we plan to employ around 280."
He told his audience that moving BBC Sport from London to Salford saved more than £2million per year on football coverage and said the corporation was "in the final stages of a budget process to find an extra £100 million of savings" that would be announced next month.