To ask the Secretary of State for Digital, Culture, Media and Sport, if he will make an assessment of the effect of privatising Channel 4 on (a) businesses and jobs in the UK production sector; (b) the balance in the creative economy between London and the rest of the UK and (c) UK viewers’ access to original and distinctive UK content.
The government has recently consulted on whether an alternative ownership model for Channel 4 (but one where it retains a public service remit) may be better for the broadcaster, and better for the country.
We want Channel 4 to continue to be a public service broadcaster, and we want it to and continue to contribute socially, economically and culturally to life across the UK. But there is a wealth of evidence - including Ofcom’s recent report - on the future challenges facing our traditional linear TV broadcasters. Linear TV viewing is down almost 60% amongst 16-25 year olds since 2010, whilst 16-34 year olds now spend almost twice as much time on YouTube and subscription VoD services than they do with broadcast content. There are now 315 channels, compared to 5 in 1982 when Channel 4 was established. Linear TV advertising revenues - which constituted 74% of Channel 4’s revenue in 2020 - have declined across the sector at a compound annual rate of 2.5% since 2015.
Channel 4 is uniquely constrained in its ability to meet these challenges while it remains under public ownership - particularly because its access to capital and ability to pursue strategic partnership opportunities is limited.
Moving Channel 4 into private ownership could allow it to access new capital, take advantage of international opportunities, and create strategic partnerships only available through the private sector.
Consulting on the broadcaster’s future is therefore about ensuring that Channel 4 can continue to contribute to the UK’s success in public service broadcasting for years to come, and how we ensure its ownership model best supports this aim.
The channel’s wider economic and social contributions, its role in the creative economies of the nations and regions, and its remit are among the issues we have consulted on.
The consultation opened on 6 July, running for 10 weeks, before closing on 14 September. We are currently analysing responses to our consultation, and evidence received through it, to inform our policy-making decisions.Once we have answered the questions set out in the consultation, we will know what specific impacts to assess and will therefore be in a position to carry out an impact assessment.