Privatising Channel 4 would be ‘overwhelmingly negative’

Privatising UK broadcaster Channel 4 would be “overwhelmingly negative” for the media industry, while the network’s current public service remit is “comfortably sustainable”, according to a new study.

C4’s future is under intense scrutiny, with the current British Conservative government increasingly leaning towards changing its current ad-funded, public service model to a fully commercial broadcast operation with a private owner.

The study, which C4 commissioned, suggests that a commercial owner would “need to get significantly more ‘bang for the buck’” in ad revenues per pound than the current programme investment, which accounts for 70% of expenditure.

This would especially damage smaller regional independent producers, as well as the wider broadcasting and creative markets, and the societal aspects of C4’s news, current affairs and more challenging genre programmes.

“The impact would also be overwhelmingly negative for the overall economy, the broadcasting ecology and creative industries, technology adoption and commercial innovation, C4’s consumer surplus and advertiser surplus, and wider society,” according to the study.

Author Patrick Barwise, emeritus professor of management and marketing at London Business School, and Gillian Brooks from Oxford University’s Centre for Corporate Reputation, suggest the buyer would likely be a large US media group, as was the case when Viacom bought Channel 5.

They also predicted it would be difficult to attract a buyer with “dropping or weakening the current 100% publisher-broadcaster model”, as an American company would look to use its own production affiliates.

“As our upcoming annual report will demonstrate, Channel 4 is in strong creative and commercial health and, critically, it is delivering well to its public service remit,” said Channel 4 CEO David Abraham.

“It is vital that the current debate about Channel 4’s future is informed by credible and independent research.

“Ofcom, EY and Enders [Analysis] have all recently concluded that Channel 4’s current model is sustainable and as this latest report shows, privatisation could actually make Channel 4’s remit less sustainable and would have a negative impact on the UK economy and UK viewers.”

The news comes at a tumultuous time for the British broadcast industry, with the government set to release a White Paper outlining its plans for the future of public broadcaster the BBC.

Reports over the weekend that the government will ban the BBC from competitively scheduling its top-rating programmes against commercial rivals have sparked furious debate.