The government has confirmed that it will push on with Channel 4 privatisation and that the broadcaster will be allowed to produce content in-house for the first time.
The change was signalled as part of a DCMS White Paper to be put to Parliament next month.
The government’s plans for Channel 4 fly in the face of widespread opposition from both the industry itself and even Conservative MPs.
Father of the House Sir Peter Bottomley, said in the House of Commons that “Channel 4 is in the best state it’s been creatively and financially for decades” and that the “government could do best by leaving it alone”.
Former Tory Minister Damian Green, pointed out that the broadcasting industry was overwhelmingly saying that “Channel 4 isn’t broke and doesn’t need fixing in this way”.
The government says that independent production in the UK is a “mature £3 billion industry and that “indies’ are increasingly less reliant on Channel 4 for commissions.” And that “only seven per cent of the sector’s revenues come from Channel 4 and it spends significantly less in the north, as a percentage of total production spend, than ITV.”
The government statement also said that Channel 4 “spends less with the smallest independent producers than all other large PSBs – for example, only 16 per cent of Channel 4’s average external commissioning spent between 2018 and 2020 was with producers with turnover of less than £10m, compared to 37 per cent of Channel 5’s.”
The statement again used the argument that with Channel 4 facing “unprecedented competition” from “global giants with deep pockets,” privatisation was necessary so that Channel 4 can borrow money or raise private sector capital.
Many have pointed out that the government’s desire to remake Channel 4 in the mould of Netflix and other streamers is looking increasingly misguided. Channel 4 News’ Krishnan Guru-Murthy said on Twitter: “Govt will publish plan to privatise Channel 4 tomorrow. Ministers say will ‘unleash its potential’ to compete with Netflix (which is seeing subscribers cancel, is massively in debt and changing business model to start advertising).”
The government statement concluded that “Access to capital and the freedom to make and own content are important tools Channel 4 will need to succeed in the future, create new revenue streams and compete. The government believes the required investment to do this at scale and pace is best provided under private ownership, rather than asking taxpayers’ to bear the associated risk.”
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