Summary
Channel 4 has been one of the UK’s public service broadcasters since 1982. In addition to Channel 4, Channel 4 Corporation (C4C) now operates a portfolio of channels: E4, More4, Film4 and 4seven, as well as All 4, its on-demand service. It is state-owned and commercially funded.
In July 2021, the Government launched a consultation on privatising C4C and stated that privatisation was its preferred option. This was not the right approach. The Government should have set out its vision for the future of public service broadcasting as a whole before examining what place Channel 4 should have in that ecosystem, and which business model it needs to realise that role. What kind of content public service broadcasters should produce, for what audiences and in what markets are crucial questions that must be answered before a decision is made about the ownership of C4C.
C4C relies almost entirely on advertising revenue because it is a publisher-broadcaster and does not produce its own programmes. This business model is designed to guarantee investment in the independent production sector. C4C’s size and agility have benefits, and it has moved to digital content distribution faster than many rivals. However, the unique business model also poses challenges to C4C’s future. C4C lacks the intellectual property, access to capital, opportunities to diversify revenues and to consolidate with others which privately owned public service broadcasters enjoy.
We are not convinced either by those who claim that privatisation is an urgent necessity or by those who warn that it would be a catastrophe for viewers and independent producers. Rather, the risks and opportunities of privatisation must be weighed against the risks and opportunities of continued state ownership. This will depend in part on how willing the Government is to protect C4C’s public service remit and contribution to the creative industries as part of any sale. We also recommend that, regardless of ownership, Channel 4’s role in supporting small, medium, diverse and regional production companies should be strengthened, while ensuring that the interests of large, established production companies do not take precedence over the Corporation’s sustainability.
We welcome the Government’s and C4C’s sincerity in seeking the strongest future for the brand. However, the board of C4C should be open to all possibilities for achieving this: including privatisation. Likewise, it would be remiss for the Government not to consider possible reforms which might make C4C more sustainable without a change of ownership.
The debate on C4C’s ownership has been a binary one: between privatisation and the status quo. It should instead start by establishing our ambitions for C4C, before considering how best they can be realised.