The government has launched a public consultation on Channel 4, seeking views on whether the broadcaster should move outside London and commission more shows from the nations and regions.

The consultation also asks whether Channel 4 should be able to make larger investments in production companies.

The 12 week consultation is pitched by the DCMS as an investigation into how C4 can contribute to regional economic growth, stimulate regional creative industries and better serve regional audiences.

It asks three key questions:

– To what extent should Channel 4 be based outside London, potentially including moving its headquarters;

– Whether more programmes shown on Channel 4 should be made outside London;

– Whether Channel 4 should be able to make larger investments in production companies to support the development of emerging talent, including that from the regions, and help bolster Channel 4’s future financial position.

The consultation exercise is pitched as part of the government’s broader policy objective of rebalancing the UK economy so it is less reliant on London.

It notes that Channel 4 already delivers significant public value in various ways, but says “there is scope for it to do more.”

“In particular, the government recognises that the growth in the broadcasting and production sector has not been evenly distributed, with more than two thirds of producers based in London and the South East. This limits the spread of jobs, prosperity and opportunity, not only in terms of regional growth, but also the representation of local views and interests on television.”  

The document also says the DCMS plans to explore what other public service broadcasters, including ITV and Channel 5, can do to drive “strong creative clusters right across the UK.”

In  2015  C4  spent  £152m  on  productions  outside  of  London  (of  which  £28m  was  in  the  UK  nations),  from  a  total  original  content  spend  of  £455m. 

Of  C4’s  total  staff  of  819  (at  year  end  2015),  around  25  –  3%  of  the  total  workforce  –  are  based  outside  London. 

The document states: “The  government  believes  that  moving  Channel  4  staff  outside  of  London  warrants  detailed  consideration  –  and  that  this  consideration  should  include  potentially  moving  its  headquarters.  Any  move  should  be  capable  of  stimulating  a  regional  cluster  –  or  strengthening  an  existing  one  –  to  create  employment  opportunities  and  enhance  regional economic growth.”

The  government  is  also  seeking  views  on  whether  Channel  4’s  regional  production  quotas  should  change, possibly with higher requirements to spend  50%  of  expenditure  on  new  content  from the regions. 

The government is also looking at whether C4 can own larger stakes in production companies than the current 25% stake it takes when the broadcaster invests. It asks whether C4 should be able to take up to 49% stakes in indie. This, it says, could enable C4  to  make  a  bigger  impact  in  supporting  the  growth  of  developing  small  and  medium-sized  production  companies  around  the  UK,  as  well  as supporting Channel 4’s ability to diversify its sources of income.

The document notes that C4 generates annual revenue of nearly £1bn, but relies on advertising revenues for 94% of its income, “making its business model highly cyclical and potentially also at risk from the changes to the broadcasting landscape”. 91% of C4’s advertising revenue comes from TV advertising and 9% from digital advertising. 

Tim Dams

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