The government's Digital Britain white paper proposes major changes to Channel 4's role and remit, but can it survive as a commercially funded public service broadcaster?
The digital era has struck the world rather rapidly, with more and more new technologies and innovations appearing within society everyday. In order for countries to keep up with this rapid rate of technological change, the only answer is to change alongside it. Within the media industry and television in particular, society has rapidly transformed from being reliant on four PSB channels (BBC1, BBC2, ITV and C4) to a multi-channel environment, which is soon to become entirely digital. With this in mind, society has recently seen many debates arise over the future of the well-established Public Service Broadcasting system within Britain. Because of this, we have seen the complete renovation of the BBC into the modern 'powerhouse', as we now know it (with its successful, fresh look on scheduling, website and digital channels.) However, in doing this, it is thought that other PSB's including Channel 4 are being left behind without the funding or facilities to modernise.
Channel 4 has come under serious pressures regarding it's funding recently due to what Ofcom calls "the huge changes brought about by the transition to the digital era" (Anon; www.ofcom.org.uk). Due to its lack of funding, the channel went to the government for help in 2007 where it gained £14million of taxpayer's money. However, this was all put on hold as the broadcaster awaited long anticipated decisions in the form of the government's Digital Britain report, which was released in June 2009.
The government's Digital Britain white paper is a project, which began in October 2008, as a way of securing Britain a place within the digital era. The project is central to the plan published by the British prime minister, Gordon Brown, known as 'Building Britain's Future', which aims to build Britain into a 'stronger, fairer and more prosperous country'(Anon; www.number10.gov.uk). The final Digital Britain report was revealed on 16th June 2009 and includes possible changes to the workings of broadband access, internet use and also Public Service Broadcasting within the near future.
With regards to the possible renovation of Public Service Broadcasting, the project's ambition is to 'ensure the provision of engaging public service content of quality and range, from multiple providers on multiple platforms, to a world-class standard' (Anon, www.culture.gov.uk.)
From a broadcasting point of view, the Digital Britain report appears to suggest a reformed Channel 4, built up to be a bigger public service broadcaster and as a rival to the BBC. Though, in doing this, it suggests that Channel 4 would have to gain support from both BBC Worldwide and, possibly, external, commercial investors. This, in turn, may fund children's television, as well as local, regional and other news delivered by a range of providers. Although, in saying this, no final conclusion was drawn within the final report in June 2009.
In this report, the government proposed suggestions of other commercial partnerships for Channel 4, in order to secure funding for their future. Such suggestions are said to be still being considered. The government also ruled out the suggested alternative of the partial privatisation of Channel 4. This would have worked by either facilitating a union with certain rivals such as Five or by selling stock on the markets. The government is also said to have ruled out backing Channel 4 but have said that they would be willing to back such a joint venture between the broadcaster and such companies as BBC worldwide, if it were to occur in the future. However, the report concluded that this alternative "could not be assured of delivering" Channel 4's "policy objectives" in the long term (O'Carroll, www.mediaweek.com).
Channel 4, themselves, are said to have backed Lord Carter, the communications minister in charge of the final report, and his rejection of a merger with Five. Luke Johnson, chairman of Channel 4, is quoted in a recent report welcoming "explicit rejection of a partial privatisation of Channel 4 through a forced commercial merger"(O'Carroll, www.mediaweek.com) In this it is thought that he and his fellow Channel 4 executives are favouring the link with BBC worldwide following the further work that is needed on the joint venture. Johnson is further quoted saying that such a joint venture "remains our preferred means of securing more sustainable funding to support our public service delivery and we look forward to confirming with BBC Worldwide in the near future the proposed terms of our partnership"(O'Carroll, www.mediaweek.com). Without this venture with BBC worldwide, Channel 4 would face further cutbacks after the realisation that it would hold a funding gap of approximately £150 million a year, in the near future. However, these issues will now be dealt with by new hands; it was released in November, that current chairman of Abbey National, Lord Terry Burns, will replace Luke Johnson as Chairman of Channel 4 as of January 2010 (Laughlin, A; www.digitalspy.co.uk). Many now rely on Lord Burns to put a fresh outlook on the future of Channel 4 as a commercially funded public service broadcaster. Channel 4 was initially established with the remit of public service responsibilities that it must continue to accomplish if it wants to remain a commercially funded public service broadcaster. However, the remit changes regularly and is dictated by several different communications and broadcasting acts and is regulated by various authorities beginning with the IBA (Independent Broadcasting Authority) and the ITC (Independent Television Commission) and is now answerable to Ofcom. Ofcom is also the regulator of other public service broadcasters such as BBC and ITV. The introduction of Channel 4's current remit as written in theCommunications Act 2003states that:
"The public service remit for Channel 4 is the provision of a broad range of high quality and diverse programming which, in particular: demonstrates innovation, experiment and creativity in the form and content of programmes; appeals to the tastes and interests of a culturally diverse society; makes a significant contribution to meeting the need for the licensed public service channels to include programmes of an educational nature and other programmes of educative value; and exhibits a distinctive character."
Media within society is very different now compared to when Channel 4 was set up in 1982. When it was introduced, it was launched as a commercially funded broadcaster, owned by the public, to act as an alternative to the BBC and ITV. It's production was designed to be subjective towards public service. However, the digital era including the introduction and increase of digital channels and the growth of the internet means it is up against the most competitive market for advertising revenues. Although, other PSB's have to face this same market, it is obvious their public service remits are much less demanding.
Recent news, within the Digital Britain report, has shown that the government intends to change and update this remit in order to 'recast Channel 4 for a Digital Britain' (O'Carroll, www.mediaweek.com.) In this, the government will seek a remit that requires Channel 4 to:
"buy in a wide range of "original, innovative, high-quality audiovisual content, including film, which provides alternative perspectives and reflects the cultural diversity of the UK"; provide services, scheduling and programming "that can stimulate learning and that will inform, challenge and inspire people, particularly older children and younger audiences"; sustain a tough dedication to "distinctive national and international news and current affairs"; enable the development of other public service content from British culture; create new services, innovations and applications to support its overall role, "embracing the potential of all digital media to connect with audiences in new ways".
Public service broadcasting describes broadcasting that is intended for the benefit of the public rather than just for commercial reasons. Public Service Broadcasters tend to be, in some form; funded commercially i.e. BBC is funded by the license fee etc. Public service broadcasting includes niche and also big-budget factual programming alongside independent news programming, religious and children's shows. C4's public service broadcasting content includes the award-winning current affairs documentaries (e.g. Dispatches). Many argue that such high quality and informative programming is a necessity socially and it must be free for all, rather than for those who can afford to pay on an extra subscription basis (i.e. digital subscription packages).
Channel 4's problems regarding it's future as a commercially funded public service broadcaster stem from the decline in the markets for advertising. Channel 4 makes almost 90 per cent of its income from advertising, but this has been hit heavily by the recent recession and constant competition from digital channels. Advertising within television in the UK hit £3.75billion in 2000 but has now fallen back to £3 billion and is expected to decrease even further in the near future. Proving the aforementioned £150million loss in funding for the broadcaster, which along with the constant demands brought about by growing competition in the digital era, has put Channel 4 under even more pressure. These pressures are becoming more and more obvious with Channel 4 cutting £50 million from it's budget this year. It has been said that the revenue from advertising on C4 channels goes straight back into funding original British TV content (to meet PSB remits). While this revenue has fallen, online advertising has increased and is now worth about £3 billion. Soon to be replaced, Channel 4 chief executive Andy Duncan admitted earlier this year, that C4 has gained no benefit from this online revenue because 75% of the money is spent on American businesses such as Microsoft and AOL
Taking this information into account, it is hard to see a future for Channel 4 as a commercially funded public service broadcaster without a merger with another corporation. Yet, as many have argued, in doing this, the channel will no longer be the same and such a joint venture would affect the maintenance of the broadcasters remit. The governments' proposed new remit shows promise for the channel, in the form of the preferred partnerships. This idea is highly favoured by Ofcom, the broadcaster regulator, who have recommended the aforementioned partnership with BBC Worldwide. However, BBC's director general Mark Thompson is quoted to have said that "the corporation's commercial arm should not have to cross-subsidise a "failing UK business"". (Holmwood, L; www.guardian.co.uk)
Final decisions regarding funding for the broadcaster are now left to the government, whose final report of Digital Britain in June 2009 deemed inconclusive for Channel 4's problems. Due to this, Channel 4 is still left without the promise of a secure future. Research has shown that it is highly unlikely that Channel 4 will be able or even willing to survive as a commercially funded public service broadcaster with the possibility of the £150million a year deficit that the channel may face, while it is waiting for issues to be resolved. Although merger proposals have been met with complaints from each channel involved, Channel 4 still remains the obvious candidate for the long awaited BBC competitor as long as funding issues are resolved. The public opinion also remains that Channel 4 is crucial to the UK's creative output, with original drama, documentary and film funding (through Film4), though this again relies on the funding that Channel 4 is not receiving due to the depression in advertising revenue. In conclusion, Channel 4 would most definitely have a future as a commercially funded public service broadcaster if funding issues are resolved. However, with all funding suggestions and alternatives for the broadcaster yet to find approval, it is going to take even more time, more money and the possibility of the industry moving even further ahead than the channel, to come to a final, complete conclusion over the survival and future of the broadcaster.
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