The Government launched a consultation into the privatisation of Channel 4 because it expects the broadcaster to come under “increasing pressure” from streaming giants, media minister John Whittingdale has said.
The channel, which was founded in 1982 to deliver to under-served audiences, is owned by the Government and receives its funding from advertising but could be sold off to a private buyer, with potential investors likely to include big American companies.
Mr Whittingdale said increasing numbers of companies such as Netflix and Amazon Prime Video would result in a squeeze on advertising revenue for public service broadcasters (PSBs) such as Channel 4.
Speaking during a Voice Of The Listener And Viewer event, he said: “The reason we are looking at it is not because Channel 4 is performing badly now, but because we do think that in the longer term, we do think it is going to come under increasing pressure.
“Channel 4 only has essentially one form of revenue which is advertising income and as you have seen linear TV viewing is falling, there are more and more new entrants coming on board.
“You have now got at least four or five big streaming services with more potentially about to arrive and that is going to compete for viewers which is inevitably going to affect the advertising.”
He said the Government was looking at Channel 4’s prospects in “the longer term” and was considering its ability to invest in content and viewers.
“It is unlikely that Channel 4 or even the BBC are going to be able to spend the sums that Amazon are now, or Netflix are now spending in terms of TV content,” he said.
“But Channel 4 and the BBC have a good record of providing very distinctive and successful programming but they will need investment to do so.”
The Government announced this month that it would consult on whether the regulation of streaming services – so they are subject to similar rules as traditional linear broadcasters – needed “strengthening”.
Mr Whittingdale suggested streaming giants would not face as strict regulation as the PSBs.
He said: “There are quite strict requirements on the PSBs in terms of things like age appropriate warnings, things around the complaints process for harmful content etc, and none of those apply for the streaming services who obviously are attracting more and more viewers in the UK.
“So we think there is a case for putting not necessarily as strict requirements as the PSB channels have but at least some requirements on the streaming services as well.”
The session also saw Mr Whittingdale defend fledgling channel GB News, chaired by former BBC political interviewer Andrew Neil, against accusations of impartiality.
After comparing the channel to radio station LBC, he said: “I think viewers actually appreciate having provocative views expressed as long as it doesn’t turn into a propaganda station and I don’t think there is any sign of GB News doing that in the same way that there is (with) any other broadcaster.”
Meanwhile, the selection process for the chair of media regulator Ofcom was reopened last month by Culture Secretary Oliver Dowden.
Mr Whittingdale said the decision had been made because the pool of candidates had not been diverse enough.
He said: “The number of applicants we received was relatively limited and didn’t achieve the ambition we had to have quite a wide and diverse range of candidates from whom to choose.
“The Secretary of State felt that particularly because the committee had flagged up the need for a diverse range, and it is one of the requirements, that we wanted to undertake the process again to get as wide a range of possible applicants as we possibly could.”
Former Daily Mail editor and vocal BBC critic Paul Dacre was reportedly Boris Johnson’s preferred choice during the initial interviews.