Culture Secretary Oliver Dowden confirmed on Wednesday (23 June) that the government will hold a swift consultation on the proposed privatisation of Channel 4.
The possible privatisation of the broadcaster, who is home to Gogglebox, the Great British Bake Off, and It’s A Sin, could fundamentally change the way the channel has operated.
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Here’s all you need to know about who currently owns Channel 4 and what the government’s consultation means.
Who owns Channel 4?
Channel 4 is publicly owned but commercially funded.
The channel was founded in 1982 by Margaret Thatcher’s government to provide a culturally challenging alternative to BBC One, BBC Two and ITV.
The channel has no financial support from the taxpayer and sources its income from selling TV advertising in the shows broadcasted.
More than 90 per cent of the Channel 4’s income comes from advertisement. The remaining nine per cent of the channel’s income comes from new non-advertising partnerships and operations, which include digital content producer 4Studios.
The money made gets reinvested into commissioning new programmes and buying programming from mostly UK TV production companies. This means Channel 4 has never made a profit.
Why has the UK Government launched a bid to privatise Channel 4?
The UK government has said it will launch a consultation into the possible privatisation of Channel 4. The decision is part of a shake-up of British television.
The government has pitched the potential sale of the broadcaster as a near necessity, claiming the channel needs an infection of capital and a change to its non-profit remit to survive against the streaming giants.
A statement from the Department for Digital, Culture, Media and Sport said moving Channel 4 into private ownership and changing its remit could ensure its “future success and sustainability”.
Culture Secretary Oliver Dowden said: “Technology has transformed broadcasting but the rules protecting viewers and helping our traditional channels compete are from an analogue age.
“The time has come to look at how we can unleash the potential of our public service broadcasters while also making sure viewers and listeners consuming content on new formats are served by a fair and well-functioning system.
“So we’ll now be looking at how we can help make sure Channel 4 keeps its place at the heart of British broadcasting and level the playing field between broadcasters and video-on-demand services.”
The government is also looking to tighten regulation on streaming services. They are currently not regulated to the same degree as the linear broadcasters in the UK, meaning programming on Netflix isn’t investigated compared to output on the BBC, ITV, Channel 5 or Sky.
What the sale could mean for Channel 4?
Channel 4 have said that its model does not require change, and has in fact allowed UK independent TV producers to flourish.
Channel 4 chief executive, Alex Mahon, said the new commercial owner of the broadcaster would inevitably look to make a profit from the channel, meaning less money would be spent on investment outside of London, damaging the government’s levelling- up agenda.
The broadcaster is currently preparing to open regional bases in Leeds, Glasgow, and Bristol.