UK culture secretary Oliver Dowden has restated his view that changing Channel 4’s ownership is the best path for the channel, in the latest sign that the government intends to push forward with plans to privatise the state-owned broadcaster.
Speaking publicly for the first time since the government launched a consultation on the future of the commercially funded but state-owned broadcaster, Dowden will later today argue that the investments Channel 4 requires to compete with streaming giants like Netflix “should not be underwritten by a granny in Stockport or Southend.”
“I believe that if Channel 4 wants to grow then at some point soon it will need cash,” he will tell a Royal Television Society conference in Cambridge. “It can either come on the back of the taxpayer, or it can come from private investment.”
It comes after the Department for Digital, Culture, Media and Sport (DCMS) confirmed Dowden had appointed JP Morgan to provide corporate finance advice on the broadcaster’s remit, ownership and obligations relating to a change in ownership.
The American investment bank’s involvement and Dowden’s comments come hot on the heels of the government’s public consultation on the next steps for Channel 4, which only closed on Tuesday night, and which shadow culture secretary Jo Stevens condemned as a “sham”.
Channel 4 bosses have strongly disputed Dowden’s privatisation push, arguing that the channel is financially sustainable and stronger than ever after it posted its best-ever financial results in 2020, despite the pandemic.
Chief executive Alex Mahon has warned that shifting to a for-profit model would harm Channel 4’s ability to support independent producers, its spending outside London, and its reach among younger audiences.
“We have always got to be careful about doing something that might be irreversible and possibly damage things we do for the sector and the UK,” she said.
Meanwhile, chief content officer Ian Katz recently told the Edinburgh TV Festival “selling off Channel 4 would be tantamount to an act of self-harm against one of the most successful sectors of the British economy.”
Youth-oriented Channel 4, which was launched in 1982, is publicly owned but commercially funded. The lion’s share of the broadcaster’s revenue comes from advertising, accounting for 90 per cent, which helps fund its show commissions for its target younger, diverse audience.
But alongside other traditional broadcasters it is facing tough competition from new streaming rivals such as Netflix, Amazon Prime and Youtube, which are increasingly attracting younger audiences.
Yet the UK’s top advertising chiefs, including execs from Publicis, Havas and M&C Saatchi, have urged the government to rethink its plans and signed a joint letter to Dowden and Boris Johnson arguing that privatisation would be “short-sighted.”
“We ask you to think again,” they wrote in the letter. “The broadcaster’s current structure allows it to offer advertisers a brilliant platform to build their brands and drive the UK economy.”