The government is set to move ahead with its controversial plans to privatise Channel 4.
The plans had already been met with criticism from the advertising industry, with leaders saying they were concerned about the ramifications of privatisation on programming, the independent production sector and media plurality.
The government has claimed that, under private ownership, Channel 4 will no longer be restricted from producing and selling its own content and argued that this will allow it to diversify its revenue streams and “improve its long-term sustainability”.
In a broadcasting white paper published today (28 April), the government outlined that, under the new plans, Channel 4 will still be required to commission a minimum volume of programming from independent producers, in line with the quotas placed on other public service broadcasters (PSBs).
In addition, Channel 4’s existing obligations in terms of regional production outside London and England will be maintained, as will its remit to provide “distinctive, educational, innovative and experimental programming that represents the breadth of society”.
The broadcaster, which is currently publicly owned but funded privately by advertising, opened its new headquarters in Leeds last year after an earlier change prompted by the government. After shelving a sale in 2017, the government forced the broadcaster to move staff out of London.
The government stated that some of the proceeds from the sale of Channel 4 will be used to deliver a new creative dividend for the sector.
Channel 4 said in a statement: “Channel 4 will study the White Paper issued by DCMS, and a considered response will follow. However, Channel 4 remains committed to upholding and maximising its remit and public service purpose that has enabled it to shape Britain’s creative culture and make a significant contribution to the creative industries, while also investing across the UK’s Nations and Regions to create local and regional economic and social benefit.”
Earlier this month, when culture secretary Nadine Dorries decided to move forward with a sale of the broadcaster following a consultation, Channel 4 expressed its disappointment.
It said: “With over 60,000 submissions to the government’s public consultation, it is disappointing that today’s announcement has been made without formally recognising the significant public interest concerns which have been raised.”
Channel 4 said it had recently presented the DCMS with a “real alternative” to privatisation that would “safeguard its future financial stability”.
Last year, Campaign organised an open letter from the advertising industry calling for the government to “think again” about its plans for Channel 4. Industry bodies including ISBA, the IPA and the Advertising Association signed the letter, dubbed “4 The People”.
The letter described Channel 4 as a “remarkable public-private partnership success story” and said it would be “short-sighted to undermine this valuable vehicle for commercial creativity”.
Campaign submitted the letter alongside quotes from distinguished figures from across the industry to the government consultation.
Broadcasting regulation reforms
The government has also outlined plans to reform its broadcasting regulations with the aim to allow PSBs to enter the streaming age.
It highlighted that, with more people watching programmes on phones, laptops, tablets, games consoles and smart TVs, competition for viewers and advertising revenue has intensified.
The government claimed that the new plans will allow PSBs to “compete fairly”, because their remit will be “overhauled and simplified”, with a new definition of what it means to be a PSB and a focus on creating distinctive shows that reflect British culture, support domestic film and TV production and provide impartial and accurate news.
It argued that PSBs will be given greater “freedom and flexibility” and allowed to meet their public service requirements, showing content on online platforms instead of just on their main channels.
Other proposals include measures to bring video-on-demand services, such as Netflix and Amazon Prime, under UK jurisdiction and subject to a Video-on-Demand Code similar to the Broadcasting Code, enforced by Ofcom. Fines for breaches could be up to £250,000 or 5% of annual turnover.
Additionally, the white paper proposed changes to the listed events regime, which would mean that the opportunity to secure rights to air major sporting events, such as the Fifa World Cup and Wimbledon tennis championships, be made an exclusive PSB benefit.
Dorries said: “The UK’s TV and radio industries are world-renowned for their creativity, driven by exceptional talent that is delivering groundbreaking public service programming.
“Set against the backdrop of the digital transformation of our viewing habits, today’s plans will revamp decades-old laws to help our public service broadcasters compete in the internet age and usher in a new golden age for British TV and radio. This will provide jobs and growth in the future along with the content we all love.”
The government detailed that it intends to legislate “as soon as the parliamentary timetable allows”.