Channel 4 could be allowed to make its own programmes if it is privatised by the government, in a potential blow to the independent television production companies that currently make all of the broadcaster’s output.
Ministers on Tuesday invited the public and interested parties to respond to a consultation on the future of Channel 4, with a document that strongly argues the case for selling off the self-funding state-owned broadcaster.
In a sign that ministers may have already made their mind up on their plans for the channel, the document was originally published online under the title of “consultation on a sale of Channel 4”. Within hours of being published, all references to a sale had been quietly removed from the document and replaced with the more neutral phrase “a potential change of ownership”.
Potential purchasers include major US television groups such as Discovery, while the culture minister, John Whittingdale, has not ruled out a purchase by the likes of Netflix or Amazon.
The government has argued strongly in favour of privatising the broadcaster, arguing that it urgently needs outside investment and changes to its remit in order to grow and compete with the likes of Netflix.
Channel 4 has repeatedly insisted that it does not need external funding to compete with Netflix, has a strategy to move away from its reliance on television advertising, and has warned that a for-profit owner could cut its investment in original British programming.
While broadcasters such as ITV have invested heavily in their own production companies, Channel 4 is legally barred from making its own programmes and must hire external companies to make all its shows. The model, devised by Margaret Thatcher’s government in the 1980s, helped create Britain’s booming independent television production sector, but the government now says the model is outdated and is holding back Channel 4’s growth.
Independent production companies have repeatedly warned about the financial impact on small businesses if Channel 4 starts making shows in house. On Tuesday BBC director general Tim Davie called Channel 4 a “brilliant champion of smaller creative independent business” and said the BBC benefited from competing with it: “I think it’s absolutely right that there are fair and proper concerns about any future ownership, to ensure that ecosystem and all the things it brings to the UK’s creative economy is preserved.”
Ministers argue that the channel cannot continue to depend on advertising revenue, and that a privatised Channel 4, with a sharper focus on revenue from other sources, would have a better chance of long term-survival.
The government also confirmed that it felt there was no “merit or justification” in keeping any part of Channel 4 in public ownership and that it would be looking to sell 100% of the company. The consultation closes on 14 September, and a potential sale of the broadcaster could take place as soon as next year.
