Channel 4 has good results for last year, but the government is considering privatisation. Is change inevitable?

We’ve reported often on changes afoot at the BBC as it responds to declining audience and the rise of digital services. This week focus has turned to Channel 4, the other public service, though advertising funded, unlike the BBC. Despite strong figures, there’s a suggestion they would be better of privatised. Inevitably this has created a furore of responses, which we’ll try to summarise.

Channel 4 — what’s the problem? Is there one?

This week saw the publication of the Annual Report for 2020. In their own analysis, they note:

…despite the background of uncertainty and volatility resulting from the Covid-19 pandemic, Channel 4 delivered a record financial surplus of £74m at year-end – following growth in All 4 streaming views, linear viewing and digital revenues and a strong recovery in the TV advertising market.

You can read their own take on the report and the report itself (if you have time!) They bring out:

Strong progress against Future4 digital transformation strategy: streaming growth of +26% in 2020 and up >30% over 2021 YTD; digital revenue growth of +11%

You can read the Future4 strategy for yourself, but whatever your interpretation, there is one, so why is there a problem? As a management consultant might say, threats (and opportunities) come from beyond the organisation, and in this case it’s the rise of streaming the government has singled out. The broadcaster would doubtless argue their strategy is about building a strength to turn the threat into an opportunity, but it’s about several factors, including time and management energy.

So why privatise?

There’s a massive spike in public debt (many $trillions world-wide) so figures of the order of £1billion aren’t going to make an enormous difference. As you might imagine, Channel 4 has their own response. The post also notes Sir David Attenborough’s views (it’s a political attack, and a short-sighted one). It may just be the case the broadcaster isn’t of a scale to compete longer term, but privatisation could quickly become a road to takeover and more commercial goal setting.

So what?

There’s a long history (since launch) of contribution to national identity through both the main channel itself and the Film 4 brand. Money is spent on UK jobs and giving skills to UK workers. We’ve noted a lot of studios opening all across the UK in the past 18 months, a what seems to be a rise in investment from the big streamers such as Netflix (who makes The Witcher in the UK), and the Star Wars franchise. The global picture is complex, and we’d like to see how that plays into the arguments.

One thing we can say, the consultation will be fractious and we’ll be watching closely to see what happens.