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Paul Vallely: Channel 4 should not be privatised  

06 May 2022

Doing so would benefit neither journalism nor viewers, declares Paul Vallely


A protester demonstrates against the privatisation of Channel 4, outside its headquarters in central London, last week

A protester demonstrates against the privatisation of Channel 4, outside its headquarters in central London, last week

WE GOT an email this week, telling us that our Netflix subscription is to increase. Others must have had similar emails, because 1.5 million streaming subscriptions have recently been cancelled by customers who say that the cost-of-living crisis is forcing them to save money. Netflix shares have plummeted: $50 billion wiped off the value of the world’s biggest streaming service. Netflix has now cancelled many upcoming projects, including the flagship series being created by Meghan Markle.

How odd, then, that Netflix is being held up by the Government as the business model for Channel 4 once it has been privatised. Channel 4 must be freed from state ownership, the Culture Secretary, Nadine Dorries, says, to allow it to raise debt and compete with streaming giants such as Netflix and Amazon.

Even leaving aside the fact that the Netflix model appears to have run out of room for growth, the idea that Channel 4 should be a competitor with streaming services is an extremely odd one. The remit of the fourth channel was never to make a profit. It was established by Margaret Thatcher 40 years ago to challenge the BBC and ITV. All the money that it makes is reinvested in commissioning challenging programmes from independent production companies, most of them British. Privatisation would jeopardise that model.

Who would want to buy Channel 4, and why? Almost certainly, some giant production company, such as Discovery, the giant US pay-TV company that is merging with WarnerMedia, the parent company of CNN, HBO, and the Hollywood studio behind Harry Potter. Industry analysts suggest that the business logic would involve at least a 40-per-cent cut to the channel’s programming budget, and that news and current affairs would be the most likely areas to face the axe.

A cynic might suggest that, for Ms Dorries, privatisation is a way to silence a channel that has subjected the Johnson government to particularly penetrating scrutiny in recent times. Channel 4 News is routinely far less pusillanimous than the BBC, whose executives live in permanent fear of the axing of the licence fee.

It is hard to see how the privatisation of Channel 4 will benefit the viewing public. That is why 96 per cent of the responses to the government consultation on the plan opposed the idea. Critics of the sale argue that, because Channel 4 is funded entirely by advertising, it places no burden on the taxpayer. True, the Treasury could net as much as £1 billion from the sale of the channel. But that short-term gain would be at the expense of long-term pain in the form of damage to Britain’s internationally respected broadcasting industry. As many as 60 independent TV production companies could be forced to close.

Fortunately, several leading Conservative backbenchers are opposed to the sale. One, Sir Peter Bottomley, said: “Channel 4 is in the best state it’s been creatively and financially for years.” Another, Damian Green, said: “Channel 4 isn’t broke and doesn’t need fixing.” If, however, the Government can railroad enough votes to push the measure through, then Sir Keir Starmer should pledge that a Labour government will buy the channel back into public ownership at the original selling price. That should make privatisation unattractive to most buyers.

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