by Tom Mills
The Tories have Channel 4 in their crosshairs. The culture secretary, Oliver Dowden, recently confirmed that the government intends to ‘review the ownership model and remit’ of the publicly owned but commercially funded broadcaster. It is feared this will mean a rushed consultation and a rash privatisation.
How should defenders of public media respond to this latest threat? Any move to sell off Channel 4 would be a cynical act of political and culturalism vandalism, and must be strongly opposed. But a defence of Channel 4 should be rooted in an analysis of its particular model of cultural production, including its limitations, and must offer a vision of how it can be strengthened and revived.
Since Channel 4 launched in 1982, it has occupied a unique and culturally important position in the UK’s mixed economy media landscape. Like the BBC, it is a state broadcasters enmeshed in market production, required to produce particular types of public service content.
However, Channel 4 is a quite different beast to the BBC. It is a lot smaller, and is much more politically independent. It also has a slightly different public remit, and a very different funding and production model. It is publicly owned and not-for-profit, but is funded almost entirely by advertising. Basically, the Channel Four Television Corporation works by commissioning public service content (as well as plenty of commercial dross) from the private sector with income raised from selling advertising on its own channels and platforms.
The historical roots of Channel 4 lie in the media reform campaigns of the 1970s. At that stage there were only three television channels in Britain: BBC1, BBC2, and ITV. The BBC remained a patrician state broadcaster with a strong non-commercial ethos and a broadly establishment orientation. ITV, meanwhile, operated as a network of regional companies funded by advertising; commercial, but operating according to strict public service principles. The two broadcasters were distinct and competitive, but they competed for audiences and accolades rather than income and investment.
In many ways this was a highly successful model, and British broadcasting at that time enjoyed a strong reputation. From the late 1960s, however, the BBC and ITV—which together came to be dubbed the ‘duopoly’—were increasingly criticised as unaccountable, unrepresentative, and insufficiently innovative. Political agitation and lobbying fed into a public inquiry. Ultimately it was recommended that the ‘duopoly’ be preserved more or less as it was, and a new more innovative fourth channel be created with a remit to provide alternative perspectives and to cater to unrepresented audiences. The result was Channel 4.
Against the Advertisers
Commentary on the origins of Channel 4 often remarks on peculiar fact that it was the socially conservative Thatcher government that established the occasionally subversive new channel. The way this circle is usually squared is to point to the Thatcherites’ rhetoric of enterprise and innovation. There’s something in this, but in truth Channel 4 was at odds with Thatcherism not only culturally, but also in terms of its production model, which was based more in a liberal pluralist than neoliberal ethos.
As Christian Potschka writes in 2012’s Towards a Market in Broadcasting, the creation of Channel 4 went against the advertising industry that was so central to Thatcherism, which lobbied for a second purely commercial channel. The assumption was that a non-commercial, publicly-owned, and highly regulated publisher-broadcaster could deliver what the mass audience state/commercial duopoly could not.
This model, introduced before the neoliberal media reform project got into swing, most obviously reflected the interests of the small scale ‘independent’ television producers, who would provide the content for the new channel. But it was also an institutionalisation of the demand for greater political and cultural representation that had come from socialists and social movements in the 1970s, as well as reflecting the enduring strength of the public service ideal in British broadcasting.
In its first decade—its most celebrated period—Channel 4’s income came from the advertising revenue of the ITV companies, which in turn could sell advertising space on Channel 4. This meant that the commissioning of alternative and experimental programming, a core aspect of Channel 4’s public remit, would not be undermined by commercial imperatives.
This arrangement, however, did not last long. Under the Broadcasting Act 1990—the major media reform legislation of the Thatcher era—Channel 4 was required to sell its own advertising. This change was part of a broader overhaul of broadcasting that commercialised, and seriously damaged, cultural production in the UK. The change at Channel 4 had been recommended by the neoliberal Peacock Inquiry of 1986, which also recommended that the BBC should commission a portion of its content from the private sector, as was also stipulated in the Act.
Worse hit, though, was ITV. Restrictions on the number of licences a given company could hold were lifted, paving the way for a wave of corporate consolidations that, combined with a weakened regulatory system, undermined the diversity, creativity, and regional character of Britain’s once respected third channel.
In the wake of the Broadcasting Act 1990, the creative freedom that had characterised Channel 4’s early years was gradually eroded, and the organisation became less distinct as the BBC moved closer to a public-private commissioning model. In the foreword to 1999’s The Making of Channel 4, Anthony Smith, a key player in broadcasting debates in the 1970s and a director of Channel 4 in its early years, lamented that decision-making at the channel had become too risk averse and that younger programme makers were not being supported by commissioning editors.
Commercialisation at Channel 4 that decade was overseen by Michael Grade, a prominent entertainment and media executive. Grade is now a Tory peer and member of the Government’s Public Service Broadcasting Advisory Panel, and for several years has been a calling for the privatisation of Channel 4. Under his leadership, Channel 4’s commissioning became more risk averse and its programming more mainstream. It bought the rights to sporting events and tried-and-tested American television shows. In the 2000s, it also became something of a pioneer in the lucrative social sadism of Reality TV.
The genres of television programmes that proliferated in the 1990s and 2000s reflected the prevailing politics and culture, but also changes to the political economy of the sector. Like panel and game shows, Reality TV and similar genres can be produced at relatively low cost since they are less reliant on the skilled technical and creative labour associated with classic television production, most obviously actors and script writers. They can also make use of basic, utilitarian sets and/or low cost location shooting, while still offering the sort of human drama and opportunities for audience attachment to ‘characters’ associated with more expensive dramatic productions.
Such shows tend to be rigidly formulaic, which makes for accessible viewing and manageable production processes. This also means that a show format can be sold internationally. Buying up formats that have already been market tested naturally appeals to commercially minded commissioners: a well-known example of this is Channel 4’s airing of the media multinational Endemol Shine’s global franchise, Big Brother.
A similar contemporary example is ITV’s The Masked Singer, a show that is probably best known to Tribune readers for featuring the Blairite politician Alan Johnson ebulliently unmasking himself from a flamboyant golden pharaoh costume. That show started life in South Korea before being picked up by production companies around the world, including Fox in the US shortly before ITV brought the format to UK audiences.
This is the sort of cultural content capitalist markets tend towards. For decades, we have been encouraged to associate market competition with innovation and creativity, but innovation and creativity come from workers—from screenwriters, directors, costume and set designers, camera operators, editors, sound engineers, and so on—not from investors and their managers. And while capitalist markets can certainly be disruptive socially and economically, culturally they tend towards homogeneity.
If and when Channel 4 has been a success story, it has been thanks to a system of devolved, smaller scale independent production with a public licence for experimentation and risk taking, and this has been most effective when commissioners were shielded from commercial pressures. This system of cultural production is quite different to the set of incentives that operate in an increasingly consolidated global media market.
At present, Netflix arguably looks like something of an exception to this. It has been able to offer a huge quantity of original programming, including expensive and original dramas and documentaries. In part, this is because Netflix is a subscription service. Since there is no need to expose audiences to advertising, this business model offers more freedom with the structure and style of programming. This is why HBO in the US has tended to produce more engaging and innovative programmes compared with advertising-funded networks.
In the case of Netflix, there is also the simple fact of the company’s extraordinary financial resources. As is often the case with platforms, Netflix’s goal has been market dominance, and it has pursued this with debt-fuelled growth to rapidly expand its content offering and subscriber base. This was always a risky strategy. Even if the company might now have pulled it off and manages to pay down its debt and develop a sustainable financial model, it is unlikely it will be able to maintain its content production and acquisition at the same rate with rival corporate players moving into VOD and the opportunities for new subscribers naturally declining.
The rapid growth of Netflix looms large in policy discussions around the future of public media in the UK. But really this is just the latest version of a technological determinist argument about the viability of public media that has been trotted out by corporate interests and conservative politicians for the last four decades. The current privatisation plan—which is only the latest of a number of such threats over the years—is being presented as if it is a necessary step to secure Channel 4’s long term viability in the context of new technology and changing audience habits. But none of the arguments hold water.
The Pitfalls of Privatisation
Channel 4 cannot compete with Netflix any more than the BBC can, but it doesn’t necessarily need to, and arguably should not in any case. Let’s assume, nevertheless, that competing with media multinationals is a desirable goal for a public media organisation. Changing the ownership structure of Channel 4 would not magically translate into a more commercially competitive content unless its public service requirements were weakened, or privatisation brought with it a significant cash injection.
The latter is possible, of course, but it would only provide a short term market advantage, and would likely be dependent on the former. Certain types of content are publicly mandated precisely because they are not appealing commercially. News and current affairs, for example, is usually not profitable unless it caters to especially affluent audiences, and in the private sector it has relied on corporations essentially cross-subsidising from more profitable content.
If the intention is to sell Channel 4 to a media multinational, it is hard to see how investment could be attracted without the prospect of its public service remit being eroded. On the other hand, if the intention is simply to transfer Channel Four Television Corporation into private ownership with a public offering of shares, it hard to see how this would help to make it more competitive. In in any case, Channel 4 executives have rejected the suggestion that private investment is needed to fulfil its remit.
The planned privatisation of Channel 4 is a solution in search of a problem, and yet more evidence, were it needed, that the debate around the future of public media cannot not be left to ideologues and interested parties. What, though, might Channel 4’s future look like if we were to adapt and develop its original remit?
A Channel 4 for the Future
Channel 4’s own strategy is to become ‘a digital [public service broadcaster] that retains its distinctive brand and public service impact’. The focus on public digital media is necessary and welcome, as is its recent move outside of London. But the continued dependence on digital advertising is obviously a weakness when it comes to continued innovation, not to mention audience experience.
There is an obvious alternative that would secure Channel 4’s long term viability and its public service remit. As we have seen, the original model for Channel 4 was essentially a mandated subsidy from the commercial sector to cater for underserved audiences and deliver alternative, experimental content. The most straightforward way to replicate this relatively successful model today would be with a tax on online advertising and commercial VOD platforms, with the revenue channelled directly into innovative new local production. The UK Government has already introduced a Digital Services Tax on the big digital platforms, and as Leo Watkins has pointed out, a 5% tax on online advertising tax would be more than enough not only to fund a significant increase in Channel 4’s commissioning budget, but for content to be provided on Channel 4’s platforms completely free of advertising.
Commissioning at Channel 4 could then move away from the so called ‘super-indies’ who currently dominate the content production market, and towards local and genuinely independent producers. This is an opportunity to better represent the ethnic and cultural diversity of the UK, to draw on talent currently locked out of the corporate production model, and to revive cultural production beyond the middle classes of London and the South East of England. It is also an opportunity to foster new forms of ownership in the sector, and democratic, participatory production models, building a more sustainable, innovative, and creative media ecology.
As I have argued with others in relation to the BBC, and as the Media Reform Coalition is currently exploring with its The BBC and Beyond campaign, the future of public media in the UK will not be secured with nostalgic defences of the existing institutions, nor with apologias for the patrician ethos of public service. Rather, we need to rethink what public media means in the digital age, and work towards a more democratic and accountable media system.
Tom Mills is lecturer in sociology at Aston University and chair of the Media Reform Coalition. He is the author of The BBC: Myth of a Public Service.
Originally published at Tribune and reposted with kind permission.