The privatisation of Channel 4 is on the political agenda. If it is sold
off to a group of shareholders, what would be the impact on advertisers?
Would the channel’s unique choice of programming come under threat, or
has the station already effectively ditched its public-service remit?
Richard Cook reports
Channel 4 has always occupied a special niche in British Broadcasting.
Although subject to a public-service remit and publicly owned, the
station is wholly funded by its own advertising revenues and programme
This combination leaves the station with a difficult balancing act to
perform. If its programme line-up proves to be too narrowly targeted,
the station has to go cap in hand to recover the revenue shortfall from
the ITV companies; if it’s too mainstream, those same ITV companies can
legitimately claim that Channel 4 is cannibalising ITV’s viewers and not
fulfilling its remit ‘to develop ideas for which the existing
terrestrial services and new satellite services cannot find a place’.
But some critics are now arguing that the second scenario is already a
reality, not the least of them, the chief operating officer of Granada
Media Group, Steve Morrison.
‘I don’t think anyone can deny that the Channel 4 of the 90s is very
different from what Channel 4 originally set out to be,’ Morrison
‘It has become a more conventional, mainstream channel - a Channel
three-and-half - and that is without the introduction of a profit
incentive. It has, quite understandably, taken advantage of a loosely
defined programme remit and the opportunity to sell its own airtime to
recreate itself in a different, more commercial image.’
For Morrison and others like him, the solution would be to make Channel
4 a commercial organisation, subject to the same pressures as ITV and
Channel 5, if it won’t return to its core public-service remit. Channel
4’s director of advertising sales and marketing, Stewart Butterfield,
‘The test of any privatisation has to be whether it benefits the
consumer. It is therefore for the proponents of privatising Channel 4 to
demonstrate any benefit it would bring viewers or advertisers.
‘Channel 4 exists to provide real choice, to fill the gaps left by the
mass-appeal channels. We put every available penny on to the screen.
Privatisation, however accomplished, would inevitably suck money off the
screen to reward shareholders, and to pay some spectrum tax to the
‘Worse,’ Butterfield adds, ‘shareholder pressure would threaten the
heart of the remit, that is, our commitment to innovation, our positive
relish for risk-taking. Without it, we would not have had the Big
Breakfast, or Four Weddings and a Funeral (judged uncommercial by one of
our competitors) and much more. Would shareholders have readily signed
off the cheque for Trainspotting?
‘Over 14 years, Channel 4 has provided valuable audiences to advertisers
and has now created healthy competition and a complementary (rather than
directly competitive) commercial product. We cost the public purse not
one penny. Why put this at risk if there is no consumer or commercial
benefit? It makes no sense.’
The advertising community, for the most part and at least publicly,
agrees with him, as the New PHD director, Tess Alps, confirms. ‘What
Channel 4 offers is not just about numbers and not just about audience
profile, it’s much more important than that - it’s an innovative test-
bed for commercial television and that is precisely because it’s not
privatised and doesn’t have profit as an overriding concern. So it can
try new formats.
‘It gets stick for the amount of imported programmes, but it has bought
well and anyway, they are not the things that advertisers would miss -
Friends or ER would find a commercial home without Channel 4.
‘What advertisers would really miss out on are things like Film on Four
or the Homeless season, which really can offer a unique proposition.
Channel 4 continues to innovate at a time when the rest of commercial
television is afflicted with the fear of failure.’
But, for all its reputation for innovation, there are some agencies that
share Morrison’s concern about the direction in which Channel 4 is
Morrison insists that ITV currently carries more in the way of so-called
‘public-service’ programming than Channel 4 - more drama, more factual
programming, more arts hours and more news.
Paul Longhurst, the media director of Ammirati Puris Lintas, is one who
believes too many agencies have swallowed Channel 4’s claims on
innovation wholesale. ‘I’m fed up with Michael Grade banging on about
preserving minority interests,’ he says.
‘All that rhetoric simply doesn’t mesh with the reality of station
performance. Take, for example, a random week’s ratings figures for
Channel 4 in August. It doesn’t make ‘innovative’ reading - Countdown
has five places in the top ten list, while Brookside is getting just 4.6
million viewers, when rival soaps like EastEnders and Coronation Street
command three times the audience. These are not minority shows: they’re
would-be mainstream shows that command a minority audience.
‘Advertisers and agencies have a right to expect mainstream shows to
achieve reasonable ratings, no matter what channel they are on. We want
the BBC to pioneer programmes and the commercial channels to deliver
audiences. Channel 4 now just seems to show loads of repeats, US imports
and a failed soap.
‘It’s simply no defence saying that niche programmes hold back the
channel’s ratings. In a typical week, BBC2 gets 5.84 million for
Gardeners’ World, which is hardly mainstream stuff, but that’s 1.3
million more than Brookside. It appears that BBC2 can deliver ratings
and alternatives but Channel 4 can’t.
‘The point is that Channel 4 could deliver bigger audiences within the
confines of its remit, but it is simply not doing that at the moment.
Privatisation would help to solve that problem.’