Should Channel 4 merge with the BBC?
OFCOM have suggested that Channel 4 merge with BBC
Worldwide (the profit making commercial arm of the Corporation) so as to keep the group afloat. This would cover the £100 million per annum that it is said Channel 4 will need to survive. Is this a step worth taking for the good of British television or is it a misdirected venture that is unfair on the BBC?
You can also add to the debate by leaving your comment at the end of the page.
If Channel 4 were to collapse, other companies would also suffer
Channel 4 employs ‘more than 300 independent production companies right across the UK’ (1) to make its
programmes. If they were to cease to exist, many of these companies would suffer and perhaps even go bankrupt. This would greatly damage the UK arts scene as a whole, inevitably reducing the quality and variety on our TV screens. Along with this, Channel 4 stress on their website that they invest ‘heavily in training and talent development’ (2) in the UK – the evaporation of such support could turn young people away from the industry in the long term.
Enforces the plurality of PSB
The merger would allow Channel 4 to continue its existence. Its demise would affect the range of opinion offered by public sector TV, especially in terms of news and current affairs programmes. The idea of plurality on public service broadcasts is one that is advocated by OFCOM and heavily stressed by Channel 4 Chief Executive Andy Duncan, who is in favour of exploring the possibilities of the merger.
The merger could increase the profitability of BBC Worldwide
Channel 4’s credentials could help to boost the profits made by BBC Worldwide (or ‘4 Worldwide’ in its proposed new guise). Andy Duncan cites Channel 4’s ‘brand, commercial expertise and strong UK presence’ (1) as a major selling point for the merger. The BBC would gain something from the partnership.
Seeing as the profits made by BBC Worldwide are what would effectively support Channel 4, expanding the brand would surely still only be of real benefit to them. Even if the profits did expand to the point where the BBC could benefit, there is a possibility that OFCOM may have underestimated the amounts needed by Channel 4 to survive – they state £100 million, whereas Channel 4 themselves say ‘that it requires up to £150 million a year’ (1). It is hard to conceive that profitability would increase more than 40%, bearing in mind that BBC Worldwide made profits of £112.5 million last year (2).
Sneaky way of gaining public funds
Such a venture is a merely a disguised movement towards public money. John Whittingdale MP argued: ‘This is essentially a plan aimed at taking public money surreptitiously, because it take profits away from the BBC’ (1). Taking licence fee money would be something that would be hard to justify in public eyes. The idea of ‘top-slicing’ the licence fee has been rejected by OFCOM, so whilst Channel 4 will not be directly receiving public money, essentially that is where its money will come from. The BBC's budget may have to be cut in light of this.
Licence fee hike possible
Potentially, allowing Channel 4 to use some of what has previously been used to cover BBC Budget may lead to a licence fee increase. This is going to hit households hard in the current economic climate. Many argue that the licence fee is already too high, such a move may create mass protest or even a boycott.
BBC executives will be mindful of the economic situation and are unlikely to introduce an increase, as it will potentially damage the numbers purchasing a licence. With the rise of online television stations (4OD, BBC iPlayer, YouTube etc) executives will be exceedingly keen to keep hold of their licence fee payers. By hiking the price, they might actually reduce their revenue, rather than boosting it in that less people will be willing to shell out at the higher rate.
BBC gains very little
What does the BBC gain? It will lose some of its budget merely to support one of its ratings rivals. The failure of Channel 4's financial strategy is not the BBC's fault, thus they should not be responsible for its rescue.
Both the BBC and Channel 4 are public sector entities. Why should the BBC be the sole beneficiary of public money? Both are tied to providing public service and have high expectations on their shoulders. The reasoning that the BBC has always been the recipient of the licence fee is ridiculous and unfair.
Other options may be more suitable
A merger with Channel Five would perhaps be a better way of allowing Channel 4 to survive. Both Channel 4 and Five use advertising to raise their money and thus grouped together could possibly gain more lucrative contracts from major advertisers.
Due to the varying operating policies of the two channels, such a merger would be unlikely to work. Channel 4 is a public sector company which does not make profit, whilst Channel Five is a private shareholder owned one. Andy Duncan has likened the idea to ‘Mixing oil and water…[which]… just makes a mess’ (1). Such a situation may even create a conflict of interest, as a private company may be able influence public service broadcasts.
What do you think?