Channel 4supplementary written evidence (FCF0045)

 

House of Lords Communications and Digital Committee inquiry into the future of Channel 4

 

Response to specific points raised in David Elstein’s evidence to the committee

 

Decisions made about the future of Channel 4’s ownership model will have profound implications for UK viewers and a permanent effect on investment and jobs in the UK’s creative sector.

 

It is therefore vital that, as the committee consider the merits of a potential change in the ownership of Channel 4, the information and evidence they refer to in their deliberations is accurate. There are several points raised in Mr Elstein’s oral and written evidence which Channel 4 believes it is important to address directly to correct the public record.

 

Background: Channel 4’s remit

 

 

 

Figure 1: Channel 4 remit over time              Figure 2: Channel 4 statutory remit

 

             

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Figure 3: Channel 4 Ofcom license quotas              Figure 4: Ofcom public service broadcasting license quotas

             

 

  1. Volume of PSB content on Channel 4

 

Mr. Elstein’s written evidence submission states that:

 

Today, consumption of whatever old-style “public service broadcasting” is still provided by Channel 4 amounts to just 1 minute a day by each UK adult.” P.g 3

 

Channel 4, with its habitual fudging of the facts (in this case, trying to pass off drama and comedy as “public service”) claimed recently to be spending over £180 million a year on public service content, the true figure is less than £80 million.” P.g 3

 

 

 

 

 

 

 

 

 

  1. Channel 4’s programming quotas

 

Mr. Elstein’s evidence submission states that:

 

Apart from news and current affairs, genre programming quotas disappeared. Soon afterwards, so did most of the programmes these quotas had protected. Religion has lost its place, and arts programmes are rarities. P.g 3

 

At least it has stopped claiming to broadcast 50 hours a week of education, as it did for some years, despite transmitting almost none. Yet that minimal level of delivery is itself in breach of the requirement in the 2003 Communications Act for a “significant contribution of programmes of an educational nature and other programmes of educational value”. P.g. 5

 

Religion:

 

 

 

Arts:

 

 

 

 

 

Education:

 

 

 

Mr. Elstein’s evidence submission states that:

 

For instance, the youth-oriented sibling service, E4, is in permanent breach of the most basic condition required of Ofcom-licensed UK terrestrial broadcasters: that its schedule comprises at least 50% European works.” P.g. 5

 

 

 

 

 

 

 

  1. Channel 4 remit & regulatory accountability

 

Mr. Elstein’s evidence submission states that:

 

Anyone familiar with the history of Channel 4 will know that the “remit” is these days essentially whatever Channel 4 says it is. The truth is that the only hard quotas facing Channel 4 can be fulfilled for expenditure of less than £50 million a year. Everything else is self- prescribed, self-monitored, unquantified and unenforceable. P.g 4

 

None of it [the remit] actually subject to any regulatory enforcement.” P.g 3

 

 

 

 

 

 

  1. Channel 4 relationship with independent production sector

 

Mr. Elstein’s evidence submission states that:

 

Channel 4 was slow to deliver was in the proportion of its programming it commissioned from outside the M25. It has taken a long time and a slow ratcheting up of the target for Channel 4 to reach a 35% level (which it now comfortably exceeds). P.g 3

 

 

 

Mr. Elstein’s evidence submission states that:

 

 

Channel 4 has warned that its support for the nation’s TV production sector was at threat of “irreversible” damage from a shift into private hands. Given that last year Channel 4 spent just £155 million with production companies that qualified as independent less than 5% of sector turnover this seems a hollow warning. P.g 6

 

 

 

 

 

 

 

  1. Channel 4 cost to taxpayer

 

Mr. Elstein’s evidence submission states that:

 

The total value of this hidden subsidy from the Treasury to Channel 4 came close to £200 million, including launch costs. Those who recite the mantra that Channel 4 “costs the public nothing” forget this subsidy, along with the gifted spectrum and EPG prominence which have been worth at least £20 million a year on average since launch, or £800 million. P.g. 1

 

 

         Prominence: which ensures our channels are at the top of the electronic programme guide. This ensures the pusblic service content we have been tasked with producing is easily discoverable by audiences and enables commercially funded PSBs to maximise the advertising revenues which fund this content by reaching the largest possible audiences.

         Spectrum: access to spectrum which reaches 98.5% of the population ensures the entire country can access our content and similarly enables commercially funded PSBs to maximise advertising revenue.

 

 

 

  1. Channel 4 efficiency

 

Mr. Elstein’s evidence submission states that:

 

It has been obvious since at least 2000 that by combining back office functions with another broadcaster finance, advertising sales, HR, transmission, office administration and so on huge savings can be effected without any impact on programming strategies (other than the potential for re-investing the savings in additional content)Staff costs at Channel 4 are on average by far the highest in the media industry, with each of the 912 current employees costing the channel (in effect, us the taxpayers) £100,000 a year. P.g 5

 

 

 

 

Mr. Elstein’s evidence submission states that:

 

Although Channel 4 took temporary advantage of the furlough scheme for its lowest paid employees, there is no evidence that the board or executive addressed the issue of total staff costs at all last year. P.g. 5

 

 

 

 

 

 

October 2021

 

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[1]              https://www.ofcom.org.uk/__data/assets/pdf_file/0017/220922/C4-SMCP-2020.pdf

[2]              https://www.theguardian.com/media/2009/jan/16/itv-ofcom-fine-regional

[3]              https://www.smallscreenbigdebate.co.uk/__data/assets/pdf_file/0023/ 221954/statement-future-of-public-service-media.pdf, p.g 27

[4]              O&O/PACT (2020): UK Television Production Survey Financial Census 2020

[5]              EY, Assessing the impact of a change of ownership of Channel 4, 2021

[6]              O&O/PACT (2020): Nations and Regions Annex

[7]              O&O analysis for Channel 4, 2021