UK Government Confirms it’s Consulting on Channel 4 Sale and SVOD Regulation

23 June, 2021 

The UK’s Departments for Digital, Culture, Media & Sport has this morning confirmed it is strongly considering selling off publicly owned broadcaster Channel 4, with plans to consult on the benefits of a potential sale in the near future.

The move comes as part of a wider effort to protect the UK’s public service broadcasters (PSBs), in which the DCMS is also mulling over increased regulation of international streaming services.

A statement from the DCMS said that with “a fast-evolving media landscape, increasing competition and changing audience habits posing imminent challenges, moving Channel 4 into private ownership and changing its remit could help secure its future as a successful and sustainable public service broadcaster”.

The consultations come ahead of a broadcasting white paper, due this autumn, in which the Government will set out its strategy for ensuring that the UK’s broadcasting landscape remains fit to serve viewers and listeners.

“The time has come to look at how we can unleash the potential of our public service broadcasters while also making sure viewers and listeners consuming content on new formats are served by a fair and well-functioning system,” said Oliver Dowden, the UK’s Culture Secretary. “So we’ll now be looking at how we can help make sure Channel 4 keeps its place at the heart of British broadcasting and level the playing field between broadcasters and video-on-demand services.”

An “inconsistent, ad-hoc, and potentially harmful gap in regulation”

The Government says it wants to “level the playing field” for the UK’s domestic broadcasters, to ensure that the UK has a “diverse, free and pluralistic broadcasting landscape with high standards”.

And the first port of call in doing so will be to fix what the DCMS describes as an “inconsistent, ad-hoc, and potentially harmful gap in regulation”. As things stand, the BBC’s iPlayer service is the only on-demand service subject to Ofcom’s broadcasting code, which includes enhanced protections to audiences from harmful or offensive material and rules on accuracy and impartiality. The DCMS will now consult on whether these same regulations should be extended to cover other on-demand services, including the likes of Netflix, Disney+, and Amazon Prime Video.

The DCMS also reiterated last week’s news that the Government will take forward existing commitments to legislate to strengthen public service broadcasters’ prominence on CTV platforms.

But for Channel 4 specifically, the DCMS seems to believe that its current model, by which it is publicly owned but entirely commercially funded, is not working.

“More than 90 per cent of Channel 4’s revenue comes from advertising – which is traditionally cyclical in nature – and from events-driven sponsorship activities,” said a statement from the DCMS. “This makes it particularly vulnerable to market fluctuations and the decline in linear TV advertising spend.”

As a privately-owned broadcaster, the DCMS says Channel 4 would be allowed to access new capital, create strategic partnerships, and reach international markets which are only available through the private sector. As a privately-owned company, Channel 4 may also be more able to diversify its income streams, invest in new technology, and produce new content and programming.

Channel 4 itself doesn’t appear to agree with this view. CEO Alex Mahon, speaking as Channel 4 unveiled its latest annual report on Tuesday, warned that privatising the company “could possibly damage some of those things that we do for the sector and that we do for the UK”.

A long running debate

While the rhetoric coming from the current government certainly seems to suggest it’s strongly in favour of selling off Channel 4, there’s no guarantee this will actually happen. This isn’t the first time a sale has been proposed by the Conservative government. Back in 2015, government documents confirming that a sale was on the cards were photographed – but a sale never materialised.

2021-06-23T10:58:26+01:00

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