Channel Four: Privatisation

Department for Digital, Culture, Media and Sport written question – answered on 28th September 2021.

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Photo of Dawn Butler Dawn Butler Labour, Brent Central

To ask the Secretary of State for Digital, Culture, Media and Sport, if he will publish an impact assessment ahead of the consultation on the privatisation of Channel 4; and what the evidential basis is that the privatisation will lead to more content investment and more jobs.

Photo of Julia Lopez Julia Lopez Parliamentary Secretary (Cabinet Office), Minister of State

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 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. A thriving, sustainable Channel 4 could offer the best prospects for long-term job creation and support to the wider creative economy.

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 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.

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