Study: Channel 4’s Privatization Would Be “Overwhelmingly Negative”

LONDON: A new report has concluded that the impact of privatizing Channel 4 would be “overwhelmingly negative for the overall economy, the broadcasting ecology and creative industries, technology adoption and commercial innovation, C4’s consumer surplus and advertiser surplus, and wider society.”

The report—commissioned by C4 and authored by Patrick Barwise, emeritus professor of management and marketing at London Business School, and Gillian Brooks, research fellow at Oxford University’s Centre for Corporate Reputation—finds that C4’s public service remit is “comfortably sustainable.” It analyzes the likely consequences of privatization, assuming that the buyer would be a large U.S. media company.

It concludes that, to achieve an acceptable return on the investment, the new owner would need to get significantly more “bang for the buck” (advertising revenue per pound) from C4’s program investment, which accounts for 70 percent of its expenditure. To do so, C4 would need to shift to a more “mainstream commercial mix of programs, executions and suppliers,” and more aggressive scheduling, “all of which would weaken the delivery of its public-service remit.”

The report asserts that there is no need to privatize C4 to protect its distinctive remit, which it believes would be able to be sustained over the next ten years as a government-owned, commercially funded publisher/broadcaster. The report goes on to say that privatizing C4 would almost certainly “make the remit less sustainable,” damaging independent producers and the wider broadcasting ecology and creative industries.

Launching the new report, Channel 4’s CEO, David Abraham, commented: “As our upcoming annual report will demonstrate, Channel 4 is in strong creative and commercial health and, critically, it is delivering well to its public service remit.

“It is vital that the current debate about Channel 4’s future is informed by credible and independent research.

“Ofcom, EY and Enders have all recently concluded that Channel 4’s current model is sustainable and as this latest report shows, privatization could actually make Channel 4’s remit less sustainable and would have a negative impact on the U.K. economy and U.K. viewers.”