Future of TV IPA ISBA

Why ad bodies are ‘delighted’ UK government’s scrapping Channel 4 sale


By Hannah Bowler, Senior Reporter

January 4, 2023 | 6 min read

The ISBA and IPA react to the latest Channel 4 privatization news.

Channel 4 sale on course to be scrapped

Channel 4 sale on course to be scrapped

Industry bodies have welcomed the UK culture secretary’s recommendation to scrap the privatization of Channel 4 but said its model needs to “evolve“.

Today (January 4) recently appointed culture secretary Michelle Donelan penned a letter to UK prime minister Rishi Sunak to drop her predecessor’s plans to sell the UK broadcaster. In her letter, Donelan put forward a four-point “sustainability package” after declaring there are “better ways to ensure C4’s sustainability”.

Both the IPA and the ISBA have lobbied against privatization since it was first tabled by Boris Johnson’s government in 2021. The trade bodies today expressed their delight at the news.

Director general of the IPA Paul Bainsfair said the letter to Sunak emphasized the support and sustainability of the independent production sector. He added: “Channel 4 is a hugely successful advertising business delivering a large, unique audience profile through its PSB remit. It is well led, an innovator and with a market leading Broadcaster Video On Demand platform, it is well positioned for continued success.”

Meanwhile, Phil Smith who is director general at the ISBA, said the decision by Donelan will bring “certainty for those planning advertising campaigns, supports the UK’s creative industries, and backs future investment in all regions and nations.”

Smith said: “The ISBA has long maintained that the sustainability of Channel 4 could be ensured by changes to its business model, rather than ownership."

As part of the sustainability package, Donelan suggested changing Channel 4’s publisher-broadcaster model which restricts it from owning its own content. The letter claimed its business model outsources production to a series of independent companies and revenues are reliant on advertising is in “long-term decline“. Donelan laid out plans to legislate to allow Channel 4 to “diversify its revenue more effectively, should it wish to do so.”

Channel 4 currently gets the majority of its income from advertising but by in-housing some productions it would enable international licensing cash to come through the business.

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Donelan’s plans also include a legislative change in duty for Channel 4’s board. Previously the board has been entrusted to maintain Channel 4’s public service remit, under the new proposal the board will be primarily focused on the long-term survival of the broadcaster.

The ISBA’s statement to The Drum supports Donelan’s calls for changes at Channel 4. “Changes to viewership do mean that the TV advertising model must evolve – and that audience reach must be measured effectively. Evolving the model must now be the focus, with advertisers, broadcasters and government working together to that end,” Smith said.

As part of the negotiations with Channel 4, the broadcaster would agree to double the number of staff outside London from 300 to 600 and increase its yearly investment in skills from its current £5m to £10m.

The news comes as the broadcaster plans to rebrand its portfolio of channels and services under the Channel 4 name.

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