Channel 4 could be allowed to produce its own programs if privatized by the government, which could deal a blow to independent television production companies that currently produce all of the broadcaster’s production.
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 advocates the sale of the self-funded public broadcaster.
As a sign that ministers may have already made up their minds on their plans for the channel, the document was originally posted online under the title “Consultation on a Channel 4 Sale”. Within hours of its publication, all references to a sale had been quietly removed from the document and replaced with the more neutral phrase “a possible change of ownership”.
Potential buyers include major US TV groups such as Discovery, while Culture Secretary John Whittingdale has not ruled out a purchase by Netflix or Amazon.
The government has strongly advocated the privatization of the broadcaster, arguing that it urgently needs outside investment and changes in its remit in order to grow and compete with Netflix.
Channel 4 has repeatedly insisted it doesn’t need external funding to compete with Netflix, has a strategy to move away from its addiction to TV advertising, and warned that a for-profit owner could reduce its investment in original UK programming.
While broadcasters such as ITV have invested heavily in their own production companies, Channel 4 is legally prohibited from making its own programs and must hire outside companies to make all of its shows. The model, devised by Margaret Thatcher’s government in the 1980s, helped create Britain’s booming independent television production industry, but the government now claims the model is outdated and is holding back Channel’s growth. 4.
Independent production companies have repeatedly warned of the financial impact on small businesses if Channel 4 starts doing in-house shows. On Tuesday, BBC Managing Director Tim Davie called Channel 4 a “brilliant champion of independent creative small businesses” and said the BBC had benefited from its competition: “I think it is quite right that ‘there are just and appropriate concerns about any future property, this ecosystem and everything it brings to the UK’s creative economy is preserved.
The ministers argue that the channel cannot continue to depend on advertising revenue and that a privatized channel 4, more focused on income from other sources, would have a better chance of long-term survival.
The government also confirmed that it believes there is no “merit or justification” in keeping any part of Channel 4 in public ownership and that it will seek to sell 100% of the company. The consultation ends on September 14 and a possible sale of the broadcaster could take place as early as next year.