Page last updated at 12:12 GMT, Wednesday, 21 January 2009

Channel 4 'must form partnership'

Channel 4 Chief Executive Andy Duncan: 'This has been a long process'

Channel 4 should become part of a bigger organisation through a merger or partnerships, Ofcom has recommended.

The media regulator has suggested in a report that the channel, which faces a funding shortfall of 150m, could merge with Five or BBC Worldwide.

This would ensure that the channel was a strong alternative public service broadcaster to the BBC.

Finding new ways of providing high quality regional news on channels other than the BBC was also key, it said.

We're in discussions with BBC Worldwide at the moment and they're really very exciting
Andy Duncan
Channel 4

Ofcom chief executive Ed Richards said audiences wanted a strong alternative public broadcaster to the BBC.

Channel 4, "with its strong track record", should be at the heart of that service but, because of its funding shortfall, change was needed, Mr Richards added.

"Our preference is to try to secure that through partnerships, joint ventures or even a merger," he told BBC News.

Channel 4 chief executive Andy Duncan said a partnership with BBC Worldwide, the corporation's commercial arm, was "the preferred option".

"We're in discussions with BBC Worldwide at the moment and they're really very exciting.

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"Where you have got an alignment of interests in two companies, BBC Worldwide and Channel 4, both generate income commercially to put back into content for the benefit of the public," he told BBC News.

But a merger with Five, which is part of a German-owned media conglomerate, would be "like mixing oil and water", he said.

"We are there for public purpose, Five is owned by RTL to maximise profits for their shareholders."

Ofcom said ITV and Five should be "strong commercial networks making entertaining, engaging UK content including national and international news, but with limited public service commitments".

But Richard Lindley, chairman of pressure group Voice of the Listener and Viewer said: "What is there in this idea that would necessarily create a new public service broadcaster big and strong enough to compete with the BBC and provide a real alternative to it?

"If ITV, with all its resources, can no longer afford to provide public service broadcasting, why should Channel 4, in partnership with a commercial company, be able to do any better?"

The BBC had offered to share some newsgathering resources with ITV, but Ofcom said the government needed to create an alternative plan to secure the long-term future of local news around the UK.

Channel 4's logo
In the future, Channel 4 faces a funding shortfall of 150m

It suggested the establishment of independently-funded bodies to provide regional news, at a cost of up to 50m.

It is likely that news produced by such new bodies would still be aired on ITV.

But broadcasting workers' union Bectu said the report effectively "rubberstamps ITV's proposals to cut up to 40m from its current regional news spend".

More than 400 production staff and journalists would leave ITV regional news in the next few weeks, assistant general secretary Luke Crawley said.

"The regulator's proposals for commercial regional news, without ITV, are over-complicated and put all ITV services and jobs at risk," he added.

The Newspaper Society welcomed the report and said it wanted to explore with Ofcom opportunities for regional and local newspaper companies to expand into local television services.

Ofcom also said that:

  • The traditional broadcasting model - with the BBC funded by the licence fee and commercial channels funded by advertising - was no longer sustainable
  • The commercial broadcasting sector was going through significant structural changes, including the digital switchover in 2012 and pressures on television advertising
  • This would leave an estimated shortfall in funding for commercial TV of up to 235m a year by 2012
  • It was rejecting plans for the BBC to give its existing licence fee money to other broadcasters
  • But using money from the licence fee which is currently allocated to help with switching to digital TV was a "credible funding option"
  • As well as local and national news, children's programming in the UK was also under threat
  • The government should therefore consider specific additional funding for children's programming, it said

Ofcom said decisions on many of the issues raised were "needed within the next year".

"We recognise that difficult choices will need to be made about the use of scarce resources," the report added.

Pact, the trade body for independent producers, welcomed the recommendation that the government should consider funding specifically for children's content.

The regulator said that although more than 120,000 hours of children's programmes were broadcast each year, less than a fifth was made in the UK and less than 1% were original UK productions.

Chief executive John McVay said: "This is a clear recommendation to government to address the provision of children's television, which has been a critical concern for some time.

"We hope that the upcoming Digital Britain Review will include sufficient funding to stem the rapid and catastrophic decline of UK-originated children's television that we have seen over the last year."



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