Government U-turn on the privatisation of Channel 4 reaffirms content is king

By Megan Woods

2 mins


Government U-turn on the privatisation of Channel 4 reaffirms content is king

By Megan Woods

2 mins


Earlier this week, a leaked letter to The News Agents podcast revealed that plans to privatise Channel 4 have been abandoned, in a move welcomed by the broadcaster’s chief executive, Alex Mahon. 

 

 

What to do with Channel 4 – which is currently government owned but funded by advertising – has been a topic of debate for the past few years. 

 

 

Nadine Dorris, the former culture secretary, believed that selling Channel 4 was necessary to alleviate the network from its inability to create or own content, and provide greater access to investment opportunities. Her successor, Michelle Donelan, is now proposing that the business continues to be owned by the state but is allowed to borrow more money and make its own programmes for the first time in its 40-year history.

 

 

Manifesto are not here to provide an opinion on which direction to take, but we do agree with the principle at the core of the discussion; owning content rights is key to the long term success of any broadcaster or streaming platform. 

 

 

The streaming wars has seen brands fighting to reclaim their content. Relatively new players like Disney+, Amazon Prime, and HBO Max are reclaiming their back catalogue. This has driven established Netflix to throw millions at creating their own original content; they spent $30 million per episode on Stranger Things, and $13 million per episode on The Crown in 2022 (Statista, 2022). 

 

 

Content has become the strongest acquisition tool.

 

 

In order for traditional broadcasters to survive changes to viewing behaviours, they need to move from catch up on-demand to viewing on-demand. ITV, one of Channel 4s largest competitors, recognises this with the launch of their new online home ITVX that includes live TV streaming as well as library of old and new ITV shows. 

 

 

With this move, they’ve become more of a direct competitor to Netflix and co, with further monetisation opportunities that include ad free subscriptions. This has been made possible because they create and own the rights to quality content and intellectual property to a diverse portfolio of shows that are hugely popular.

 

 

Whilst competing with global players may seem a daunting task, we believe traditional networks with content rights, like ITV and maybe Channel 4, are well placed to take them on.  After years of subscription based businesses booming comes the inevitability of subscription fatigue, exacerbated by the cost of living crisis as consumers tighten their monthly spend. As a crucial part of British broadcasting, it is exciting after years of uncertainty to see plans for Channel 4 to not just survive but flourish.

 

 

If you’re interested in finding out more, my colleague Joe has written a piece on Netflix’s strategy that provides further insight into our thinking. 

 

 

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