U.K. Mulls VOD Regulation, Channel 4 Sale

The U.K. government is looking to introduce new regulations on on-demand services and is mulling the privatization of Channel 4.

The moves are being considered as part of an ongoing review of the U.K.’s public-service broadcasting system. A white paper is due this fall on the future of broadcasting “and how we can make it fit for the 21st century,” said Oliver Dowden, Secretary of State for Digital, Culture, Media and Sports (DCMS).

“First, we need to level the playing field and address one blatant disparity forcing traditional broadcasters to compete with one hand tied behind their backs. Every ‘linear’ broadcaster—BBC, Sky, etc.—has to comply with stringent content and audience protection standards,” while streamers such as Amazon Prime and Disney+ do not. “This summer we will consult on whether it’s time to set the same basic rules for video-on-demand services as we do for traditional broadcasters,” Dowden said.

“Technology has transformed broadcasting but the rules protecting viewers and helping our traditional channels compete are from an analogue age. 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.”

He added, “The current landscape makes for an inconsistent, ad-hoc and potentially harmful gap in regulation between video-on-demand services alongside a potential competitive disadvantage between U.K. broadcasters and their internationally-funded online counterparts.

“The government will also take forward existing commitments to legislate to strengthen public-service broadcasters’ ‘prominence’ online so that their video-on-demand content can easily be found and accessed on smart TVs and other platforms and devices.”

Channel 4 is commercially funded but publicly owned, with more than 90 percent of its revenues coming from advertising and events-driven sponsorship activities. “This makes it particularly vulnerable to market fluctuations and the decline in linear TV advertising spend,” said Dowden. “Moving Channel 4 into private ownership could allow it to access new capital, create strategic partnerships and reach international markets only available through the private sector. Changes to the model may also allow Channel 4 to diversify its income streams, enable it to invest in new technology and produce new content and programming. This would better allow Channel 4 to compete and strengthen its role as a public-service broadcaster and secure the long-term benefits it can bring to the creative industries and to audiences.”

In the model being considered, Channel 4 would be sold while maintaining its public-service remit. “Private investment would mean more content, more jobs—and a more sustainable future for Channel 4,” Dowden said.