Chapter 4: Remit
94.Under the Communications Act 2003, Channel 4’s duties are:
- To make a broad range of relevant media content of high quality that, taken as a whole, appeals to the tastes and interests of a culturally diverse society
- To make high-quality films intended to be shown to the general public at the cinema in the United Kingdom
- To broadcast and distribute such content and films
- To make relevant media content that consists of news and current affairs
- To make relevant content that appeals to the tastes and interests of older children and young adults
- To broadcast or distribute by means of electronic communications networks feature films that reflect cultural activity in the United Kingdom (including third party films)
- To promote measures intended to secure that people are well-informed and motivated to participate in society in a variety of ways
- To support and stimulate well-informed debate on a wide range of issues, including by providing access to information and views from around the world and by challenging established views
- To promote alternative views and new perspectives
- To provide access to material that is intended to inspire people to make changes in their lives.89
95.The Digital Economy Act 2010 stipulates that C4C’s programming must:
- Demonstrate innovation, experimentation and creativity in the form and content of programmes
- Exhibit a distinctive character
- Make a significant contribution to meeting the need for the licensed public service channels to include programmes of an educational nature and other programmes of educative value
- Appeal to the tastes and interests of a culturally diverse society.90
96.Like other public service broadcasters, Channel 4 has quantitative obligations. These include duties relating to original productions, news, current affairs, and spending on and hours of programmes produced outside London.91
97.Witnesses noted that the qualitative obligations are harder to regulate and are to some extent left to the interpretation of C4C’s management, whereas the quantitative obligations offer a clearer standard.92 Notwithstanding this, Professor Richard Tait argued: “British broadcasting history shows there is a danger in placing too much emphasis on the role of regulation and remits in ensuring public service broadcasters deliver on their promises and commitments.”93
98.Several witnesses were concerned that privatisation could reduce the quality and distinctiveness of C4C’s content. Krish Majumdar, co-founder,
Me + You productions, argued that C4C is more willing to take risks than other broadcasters: “No other broadcaster would have commissioned many of the programmes I have made and they have gone on to be nominated for awards or won awards.”94 Elizabeth Karlsen added that Channel 4 is more willing to take a risk on individual creatives than privately-owned broadcasters.95
99.Lord Burns, former Chair of C4C, suggested: “The long history of the commercial broadcasters when it comes to obligations upon them has been to want to chisel away over time at the things that are loss-making.”96 Dr Helen Weeds, former Chief Economist at Ofcom, similarly warned of the risk of “a slow undermining of what Channel 4 is delivering” under commercial pressures.97 Professor Richard Tait was sceptical about Ofcom’s ability to prevent this.98
100.Dr Weeds added that a private owner looking to maximise profit could focus on commissioning content which will appeal to global audiences, becoming less focused on local and regional interests.99
101.Lord Burns gave Channel 4’s coverage of the Paralympics as an example of what could be lost: “No other broadcaster would be doing the Paralympics in the way Channel 4 has, and it seems to me that that is a fine example of what you would describe as public service broadcasting.”100
102.However, David Elstein, former CEO of Channel 5, questioned the view that Channel 4’s coverage of the Paralympics was not a commercially attractive proposition and added that even if it were not so: “you cannot make a decision about the bigger picture of the prospect for public service broadcasting and for Channel 4 under private ownership on the basis of 1 per cent of transmissions during the year.”101
103.Others were more optimistic than Lord Burns and Dr Weeds about the relationship between the public service remit and any buyer’s commercial interests. Mark Oliver, co-founder and Chair of Oliver & Ohlbaum Associates, told us that rather than simply being a burden, the remit “probably helps sustain the brand image for innovation, quirkiness, iconoclasm, et cetera, which Channel 4 is known for and has a value.”102 Julia Lopez MP, Minister of State at the Department for Digital, Culture, Media and Sport, shared this assessment.103
104.Lord Grade of Yarmouth, former CEO of C4C, agreed: “If anybody acquiring that business destroys that brand, they are doing nothing but destroying value for their own shareholders.”104 As did Claire Enders, founder of Enders Analysis, who told us: “I am certain that no one would buy Channel 4, a politically delicate asset that the Government has dumped on repeatedly, without wishing it an exceptional future, the very best of futures”.105
105.She added that advertisers “were very specific about really liking advertising on Channel 4 as it is. They would be the first line of resistance if Channel 4 found its income going down, having started to change its mix in any material way away from something that is innovative, fresh and progressive.”106
106.The Government and Enders Analysis suggested that investment in public service content could increase under a private owner.107 Enders Analysis noted:
“Sky runs a high-quality and structurally unprofitable news operation and has built up a public service profile with Sky Arts (now a free-to-air channel), alongside the launch of Sky Nature and the provision of Sky Kids, both of which have clear educational components—none of this is mandated by Ofcom through quotas”.108
107.Alex Mahon, CEO of C4C, agreed that a private owner “would still do things that felt noisy and punchy with the brand”, such as The Great British Bake Off and Married at First Sight. However, she distinguished these from other programmes such as Help!—a drama about a care home—which “contribute to the social health and welfare of Britain” but which she felt a private owner would not commission because they would lose money.109 Charles Gurassa, Chair of C4C, added that while Channel 4 could produce its own version of other “distinctively British” programmes such as Amazon Prime’s Clarkson’s Farm “tomorrow”, others would not produce It’s a Sin, Channel 4’s drama about AIDS, or a documentary on sexual abuse in the police.110
108.Channel 4 compared its fulfilment of news obligations favourably with that of commercial PSBs.111 However, Enders Analysis noted that “ITV produces significantly greater minutage of news in peak-time [than Channel 4], and also provides regional news programming” while Channel 5 is making a change to its news schedule which will require greater investment.112
109.Figures 2 and 3 show that ITV, Channel 4 and Channel 5 all exceeded their obligations in broadcasting national and international news and original production in each year from 2015 to 2020.
Figure 4: Hours of national and international news per year
Source: Ofcom, PSB Annual Compliance Report 2021 (August 2021): https://www.ofcom.org.uk/tv-radio-and-on-demand/information-for-industry/public-service-broadcasting/annual-report-2021
Figure 5: Original production (hours shown)
Source: Ofcom, PSB Annual Compliance Report 2021 (August 2021): https://www.ofcom.org.uk/tv-radio-and-on-demand/information-for-industry/public-service-broadcasting/annual-report-2021 [accessed 24 November 2021]
110.There was some disagreement among proponents of privatisation about what remit a privatised Channel 4 should have. Lord Grade of Yarmouth and Luke Johnson, former Chair of C4C, argued that a prescriptive remit would be undesirable, as it would stifle innovation, and unnecessary given the strength of the brand.113 Conversely, Claire Enders and David Elstein saw an opportunity to clarify and strengthen Channel 4’s public service obligations.114 This could include the Government’s intention to introduce requirements relating to ‘Britishness’.115 To address C4C’s concern that a new owner could cut spending on content, Enders Analysis argued that quotas for expenditure on public service content could be introduced.116
111.Lord Grade told us that the highest bidder for C4C may not be the right bidder. Claire Enders agreed and recommended a ‘qualified bidder’ process modelled on the competition for the National Lottery licence.117
112.The minister confirmed: “What is offered by any potential buyer in terms of the public service broadcasting remit is something that we would be considering alongside whatever price was being proposed.”118
113.As it does not own intellectual property, Channel 4’s commercial value is in its brand. It would not be attractive for a new owner to undermine the brand by moving significantly away from the types of programmes it currently broadcasts. However, a private owner might avoid commissioning some programmes which have clear public service value but would not attract a large audience.
114.Regardless of ownership, the quantitative obligations on Channel 4—such as in relation to original production and news—should be retained. The Government should consider introducing quotas related to content expenditure to guard against cost-cutting in this area.
89 Ofcom, Channel 4 Corporation Remit (July 2017), p 10: https://www.ofcom.org.uk/__data/assets/pdf_file/0018/104094/Channel-4-Corporation-Remit-Research-Report-2017.pdf [accessed 9 November 2021]
90 Ibid.
91 Channel 4, A potential change of ownership of Channel Four Television Corporation (September 2021), p 33: https://assets-corporate.channel4.com/_flysystem/s3/2021–09/September%202021%20-%20Channel%204%20response%20to%20DCMS%20consultation%20-%20FINAL%20%28accessible%29.pdf [accessed 9 November 2021]
108 Ibid.
111 Channel 4, A potential change of ownership of Channel Four Television Corporation (September 2021), p 9: https://assets-corporate.channel4.com/_flysystem/s3/2021–09/September%202021%20-%20Channel%204%20response%20to%20DCMS%20consultation%20-%20FINAL%20%28accessible%29.pdf [accessed 9 November 2021] and Q 58 (Alex Mahon)
115 Adam Sherwin, ‘Ministers plan legal requirement for broadcasters to make “clearly British” shows like Only Fools and Horses’, iNews (15 September 2021): https://inews.co.uk/news/john-whittingdale-public-sector-broadcasters-british-only-fools-fleabag-1201634 [accessed 9 November 2021]