This month, after several months of speculation, the Government published its consultation on the potential change of ownership of Channel 4.
Pact believes that the sale of Channel 4, and any change to its remit, will have drastic implications for the UK’s independent film and TV sector, impacting our members’ businesses and the many thousands of jobs they create and sustain across the UK.
Created by Margaret Thatcher nearly 40 years ago, as a publisher/broadcaster, Channel 4 holds a unique position in the UK’s delicately-balanced broadcasting ecology, with a remit to take risks and commission new ideas from indies. The UK production sector is a £3.3bn global success story, but the Government’s plans could jeopardise its future.
Channel 4 has been a catalyst for generations of entrepreneurs, with many indies getting their first commissions through the broadcaster. Indies up and down the country employ local people, provide roles for freelancers, and benefit other businesses such as locations, caterers and post-production houses. The Government’s plan won’t only impact indies, it will have a knock-on effect on other local jobs and businesses, too.
Last year, Channel 4 worked with 161 independent production companies generating 7000 jobs across the country. This diversity of supply and programming will be lost if Channel 4 is privatised and allowed to make and control its own programmes.
To date, Channel 4 has spent approximately £12bn across the UK, investing in hundreds of independent production companies, enabling and improving access, skills, international activity and diversity. At a time when our sector is busier than ever, we need to attract new, diverse talent for the future and a broadcaster that is committed to commissioning new voices and ideas as a principle of its remit.
In 2020, Channel 4 spent £550m on total content and £370m on UK originated programmes, all of which are supplied by the UK independent production sector. Channel 4 contributed around £992m to the UK economy in 2019, and 47% of Channel 4’s content spend came from the Nations and Regions in 2020.
Just because Channel 4 doesn’t make its own programmes it doesn’t mean that it doesn’t add value.
Due to legislation introduced in the 2003 Communications Act none of the four public service broadcasters (BBC, ITV, Five and Channel 4) are allowed to own or control the copyright in the programmes made for them by UK independent producers. These are called the “Terms of Trade” and were introduced to tackle dominant buyer power and allow a sector that was sub-optimal to attract private sector investment and scale.
After many years of being service companies working for an oligopolistic broadcasting system, UK independent producers are able to sell their programmes both domestically and internationally. This has transformed the sector from a declining cottage industry into an international success story. In under 20 years British independent production businesses have grown total revenues from £600m in 2001 to over £3bn in 2019. Nearly half of this amount comes from selling programmes and IP to global markets. This legislation has underpinned this global success and is now under threat.
To “sweeten the deal” for a buyer for Channel 4, the UK Government may remove or change this fundamental intervention. This could mean a double jeopardy to UK businesses; not only losing part of the broadcasting market but also losing significant revenue streams from programme sales and IP exploitation. Money that independent producers use to fund R&D, talent development and expansion. In one fell swoop the UK Government could turn out the lights for many businesses who are still trying to build back after the pandemic which has had a serious impact on the UK TV industry. Now is not the time to threaten our recovery or our future prospects.
If Channel 4 is sold, these profits will be transferred to corporate shareholders or a foreign owner.
The Government’s consultation provides a paucity of evidence and makes unfounded assumptions about Channel 4’s future prospects.
Channel 4 helps drive aspiration enabling creative entrepreneurs to get their foot in the door of UK broadcasting. Now is not the time to damage an intervention which can do more to support the recovery from the pandemic and ensure that opportunities are available to many more talented and entrepreneurial people across the whole of the UK.
John McVay, CEO, Pact
Photo by Nabil Saleh on Unsplash