To the House of Lords Communications Committee on the sustainability of Channel 4 April 2016




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EXECUTIVE SUMMARY

 

  1. Broadcasting in the UK has a crucial role to play in making us aware of what is happening in the world and the UK’s position internationally. There is extensive evidence that engagement with the wider world leads to a more tolerant society which is able to do business with the wider world. These wider social benefits of international content which reaches a mass audience are IBT’s primary concern.

 

  1. IBT’s research demonstrates that television news and current affairs are the dominant sources of information about the world outside the UK and that, as a result of their focus on wars, conflicts and disasters, UK audiences have a distorted view of the world. This perception needs to be balanced with content which provides us with deeper understanding of the lives of people in other countries and the forces shaping our future.

 

  1. For the past 34 years Channel 4 has played an important role in delivering such content which takes us beyond news headlines and engages us with the lives of people in other countries.

 

  1. IBT views Channel 4 as an essential element in the broadcasting ecology of the UK. Its cross-subsidy model provides output which reflects a diverse range of alternative voices, as well as voices from around the world.

 

  1. IBT believes that C4C’s existing operating model and remit are sustainable for the duration of its current licence which expires on December 31st We would not want C4C’s existing operating model to be undermined by any change which might weaken its incentives to provide high quality content which engages us with the wider world.

 

 

  1. Channel 4 and its portfolio provide a range of content which is distinctively different from the other UK public service broadcasters and which appeals to a different audience. The C4C portfolio of channels is successful at attracting a broad range of viewers, especially those harder to reach groups: 16-34 year olds and the BAME audience.

 

  1. IBT agreed with Ofcom’s conclusion that C4C is effectively delivering its media content duties in 2015 and should be financially sustainable during the period of its new licence.

 

  1. As things stand, we do not believe that the long term decline in viewing to the main channel undermines the sustainability of C4C. It appears to have reversed this trend in the recent past, which is welcome news, and as long as any future losses in reach are balanced by growth to its portfolio channels, VOD and other services, we believe the corporation will be sustainable.

 

  1. Assuming C4C retains adequate commercial and regulatory flexibility so that it can be adaptable, innovative and ground-breaking in this area, we believe it will be well equipped to deal with the challenges posed by new technology and changes in viewing habits.

 

  1. IBT does not believe the C4C remit should be either relaxed or tightened. We consider that if there were any relaxation of the remit, as a result of privatisation, this would be detrimental for UK society because it is likely that the most challenging commitments in the remit would be those which are relaxed and it is these which lead to the most ground-breaking, socially valuable and innovative content.

 

  1. In light of the role the C4C portfolio plays in delivering C4C’s remit, IBT agrees that it would be sensible to explore whether the current PSB benefits should be extended to apply to the whole of the C4C portfolio, however if this were to happen there should be regular assessments to ensure that C4C maximises the impact of its PSB content and is not allowed to move it onto platforms where it will have less impact.

 

  1. IBT is convinced that C4C genuinely strives to deliver its remit and the current regulatory arrangements allow it suitable flexibility to find creative solutions when it appears there is a deficit in its delivery.

 

  1. IBT’s primary concern is that C4C should be able to continue to deliver its remit with integrity and invest its surplus in public service content instead of returns being made to shareholders if it were privatised. If C4C were operated as a more commercially driven organisation, the cross-subsidy of loss-making PSB content such as its hour long weeknight news programme or international current affairs would not be commercially viable. It would no longer be able to justify taking risks with its commissioning strategy and its commitment to less popular content, such as international current affairs, would need to be watered down.

 

  1. If C4C were privatised it would be inevitable that this would impact negatively on the independent production industry in the UK. There is a significant risk that a private owner of C4C would seek to reduce its costs and maximise its profits by making its own programmes.  Such a move would undermine the existing publisher-broadcaster model which has been hugely successful in both providing a range of public service content for audiences but also in supporting the growth of UK independent production sector over the past 30 years.

 

  1. Following research and careful consideration the Government issued C4C with a new licence in 2014 for ten years. IBT believes that the Government should honour this licence and delay any discussions of C4C privatisation until the current licence is due to expire.
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