Emily Fielder: Only privatisation will let Channel 4 compete with modern media giants

8 Apr

Emily Fielder is the Head of Communications for the Adam Smith Institute.

As to be expected, the reaction to the Government’s decision to privatise Channel 4 has been fierce.

Detractors of DCMS argue that Margaret Thatcher, who originally oversaw its inception, would be spinning in her grave, and that it would destroy a great British institution.

Their desire to protect an important cultural asset is admirable, but such appeals entirely miss two of the most compelling arguments in favour of privatisation; firstly, that the broadcasting landscape has changed beyond all recognition since the 1980s, and secondly that emancipating Channel 4 from state ownership is the best way to ensure that it continues to succeed in the future.

At present, Channel 4 is funded in much the same away as other privately owned TV stations, with the greater part of its revenue derived from advertising. To its credit, its finances are in a stable position; it made a total annual revenue of £985 million in 2020, and it has not received money from the taxpayer.

Having said that, it’s net revenue has remained broadly stable since 2006, and is likely to continue to do so. Moreover, during the torrid year that was 2020, it was forced to cut content spending by 21 per cent, in contrast to Netflix, which actually raised spending by 26 per cent in 2021.

The new giants of the media landscape are able to continue spending vast sums of money on producing new shows, whilst Channel 4 is fettered by its inability to raise private funding or capital.

On a similar note, under its current charter, Channel 4 is barred from creating any of its own intellectual property, and instead it must commission work. One way of competing effectively within the market would be to allow the broadcaster to set up its own production company, which would sit alongside the commissioning work it would continue to do.

However, producing IP would likely engender huge start-up costs, and therefore would necessitate raising a large amount of revenue.

Critics of the move to privatise Channel 4 have raised concerns about the potential impact on the UK’s creative industries.

It is certainly true that our independent arts sector is something we should be proud of, but they have failed to note that the major firms now dominating the media scene are driving investment into the British production sector to a record high. In 2018, for example, Netflix and Amazon spent £280 million on big-budget British-made shows.

Moreover, British commercial broadcasters, such as ITV and Sky manage to commission UK-made programmes without direction from the Government. ITV invests around £1 billion a year, whereas in 2021 Channel 4 spent £700 million.

Giving Channel 4 access to greater investment would allow it to both produce its own work, and likely commission more in the UK than it is already able to do.

The question, therefore, is not how effectively did it function in the past, but rather how sustainable is its present funding model in the future?

For the Channel to really grow in the future, and therefore be able to compete with streaming giants, and even other British commercial channels, it will require more revenue, which will either have to be derived from taxpayer money or from private sources.

Liberating it from state control would mean it would be able to access private capital and investment, and diversify its revenue streams, rather than having to have recourse to public money.

It is right that a close eye is kept on exactly how the Government intends to sell the Channel. It is likely that it will either be sold to a bidder, the direction in which the Government appears to be moving, or it will be floated as shares on the stock market.

If the latter, this would mean that the British public, through purchasing shares, would actually have more direct ownership of the Channel. If the former, Ofcom should take its deliberations over who is fit and proper to purchase it.

Previously, the Adam Smith Institute raised concerns that the acquisition of Channel 4 by ITV would reduce private sector competition within the British TV market, and so should be designated as an ineligible bidder. The notion of fit and proper should include questions of competition in order to ensure the sustained success of Channel 4.

Turning aside from purer economics, there is also the Conservative philosophical argument to consider. When Thatcher set up Channel 4 in 1982, there were only three TV channels, so by introducing another, she was following her principle of improving a sector by increasing competition.

Now, however, there are over 460 channels available in the UK. The idea therefore that the Government knows how to run a TV channel in such a varied market is as ludicrous as it is fundamentally unconservative.

What’s more, it is surely a curious thing in this country that we are so quick to deride other countries for having state-owned broadcasters, but are so fiercely protective of our own – even when it is detrimental to the broadcaster’s finances and future growth.

This, indeed, is the most fundamental point. Calls for Channel 4’s privatisation should not be seen as an indictment of its previous successes, but rather an endorsement of it and an acknowledgement that its future would be better served through its liberation from state ownership, as befits its place in the media landscape of a modern, liberal Britain.

Johnson and Dorries are not quite so hostile to the BBC as they pretend

18 Jan

On Sunday, Nadine Dorries tweeted: “This licence fee announcement will be the last.” On Monday afternoon, her department put out a press release which declared: “No decision on the future of the licence fee has been made.”

At the same time, Dorries told the Commons over and over again that she just wants to start a debate about the future of the licence fee.

What is going on? The Prime Minister needs to shore up his support in the parliamentary party, and bashing the BBC is one way of doing that.

“Nadine clobbers ‘biased’ BBC with £2 billion funding cut,” The Mail on Sunday reported, and went on:

“The BBC was last night on the brink of a war with the Government after Culture Secretary Nadine Dorries hit the Corporation with a two-year licence fee freeze – as her allies warned that ‘the days of state-run television are over’.”

Dorries duly announced that the licence fee has indeed been frozen at its current level of £159 for the next two years, and will then rise by the rate of inflation until the end of 2027.

If Boris Johnson were not in such trouble, the settlement would have been “more generous”, an insider confirmed. Things changed “very suddenly” a few days ago.

No plan exists for what happens after 2027. A source with comprehensive knowledge of thinking within the DCMS yesterday told ConHome it was “unrealistic” to suppose the BBC could move to a subscription model by then.

There are technical limitations: streaming services are only available if, no matter how old, poor and technologically ill-equipped one may be, one has some device on which to receive them, and the superfast broadband to deliver them.

Beyond that, decisions have to be made about what the BBC is going in future to provide. It is not difficult, unless one is among its most highly paid employees, to see faults in the Corporation, and to note the unseemly relish with which it joins in the ancient British sport of hunting down whoever happens to be Prime Minister.

What is more difficult is to determine which parts of the BBC should, indeed must, be preserved. The World Service, most people would say, at a time when the Chinese, the Russians and others are pumping out their malign and mendacious versions of events.

To destroy the rest of the Corporation’s news gathering abilities would seem to most of us like an act of vandalism. Various other parts of its output could likewise be agreed to come under the heading of public service broadcasting: coverage of state occasions, Parliament, some of the musical, educational and children’s programmes, a list which can be lengthened or shortened according to personal taste.

Much of what the BBC does, though anomalous, is not contemptible.

And then there is the question of the BBC’s role, comparable to that of the NHS, as a great unifying national institution, whatever objections may be raised to how it is actually run.

In the conservative view of the world, institutions which have existed for a long time usually deserve a degree of loyalty, and should be adapted to changing circumstance rather than abolished.

But how to adapt the BBC, when broadcasting is changing at such astonishing speed, with the rise of powerful new competitors such as Netflix and YouTube?

Many of the young find Netflix more diverse, and more representative of the world they know, than the BBC now is. They are accustomed to paying subscriptions, but averse to paying the licence fee.

John Whittingdale, a former Culture Secretary and Minister of State for Media, yesterday reminded the House that the number of television licences bought last year fell by 700,000.

At the start of the month, Whittingdale gave an interview to the in which he suggested:

“Is it not better to fund a core BBC package through a central government grant and taxation?

“Instead of £159 a year, it would be a reduced amount to pay for the things an insufficient amount of people would be willing to pay for – news, current affairs and arts programmes.

“On top of that, two-thirds of the current fee could be a voluntary subscription (for populist programming).You wouldn’t have to pay it.”

The former minister said this was a “progressive” solution, removing the inconsistency of a “flat rate, poll tax” compulsory licence fee, which could have cross-party appeal.

One rather doubts whether either the Prime Minister or the Culture Secretary wishes to go that far. They wish to show the Thatcherites in their ranks how bold they are, without actually destroying or even much diminishing the BBC.

Adrian Lee: Different values from those of the BBC: The Prisoner and the “culture war” of the sixties

29 Aug

Adrian Lee is a Solicitor-Advocate in London, specialising in criminal defence, and was twice a Conservative Parliamentary Candidate.

Fifty-five years ago this weekend, on Sunday 28th August 1966, a film crew started shooting the opening scenes of a new TV series for the Incorporated Television Company (ITC) in the streets of Westminster. One location on that sunny morning was the Abingdon Street underground car park on College Green, just opposite the Palace of Westminster. No casual passer-by could have then realised the political significance of the programme starting its first day of filming and few recognise even today that the resulting series, The Prisoner, represented a counterblast to the Left bias of the BBC from its independent rival in an undeclared Culture War of the 1960s.

During the 1960s BBC Drama received universal applause for crafting period costume series such as The Forsyte Saga and multiple adaptations of Charles Dickens’ novels. Whilst these productions exhibited little cultural or political bias, the BBC compensated when it came to their long-running series of The Wednesday Play (1964-1970). Here, the emphasis was placed upon miserablist, social realism and grotty “kitchen sink” settings with plots revolving around homelessness, abortion, and inequality.

Few will forget the impact of the plays Cathy Come Home and Up the Junction, which launched the career of Marxist filmmaker, Ken Loach.

Arguably the most notorious episode of The Wednesday Play was Peter Watkins’ film The War Game, which portrayed the after-effects of a nuclear strike on a home counties town. It was intentionally horrific and powerful propaganda for the unilateralist cause. At the last minute, the BBC realised they had gone too far and pulled it from the schedules, but they ensured that it was shown to invited audiences in cinemas and CND was able to obtain copies to show at public meetings across the country. It was belatedly given a full national broadcast by the BBC in 1985, at the height of CND’s campaigns against Cruise and Trident.

Over on ITV, the mission was to entertain rather than to preach. In the Sixties, ATV/ITC supremo Lew Grade had progressed from producing variety shows like Sunday Night at the Palladium to making glossy action series with his regular team of Monty Berman (Producer) and Dennis Spooner (Scriptwriter), such as The Saint, Department S, The Champions and Man in a Suitcase. Grade had the foresight to improve the visual quality of British television. Not since the Kordas’ Denham Studio days in the 1930s had there been such a will to beat Hollywood at their own game. Wobbly sets went, film studios replaced television studios, theme tunes were written by top composers Ron Grainer and Edwin Astley and all series were shot on film stock rather than videotape. Grade’s aim was to produce first-class products that could be sold worldwide and that meant that they had to be made in colour.

One of Grade’s best-selling shows was Danger Man, a conventional spy series featuring Anglo-Irish actor Patrick McGoohan. Danger Man had gone down well Stateside, but when the time came to switch to full colour production, McGoohan informed Grade that he wanted to embark upon a new venture with scriptwriter and author, George Markstein. McGoohan pitched an entirely original series to be called The Prisoner in which the hero is an intelligence officer who resigns his post and is promptly kidnapped by persons unknown. He wakes up in a mysterious Italianate coastal village (Portmeirion, North Wales). Each week the anonymous authorities controlling the village would attempt to extract information from him, whilst the hero would defy their will and try to escape. Grade was sufficiently intrigued by the idea to give this production his approval.

The Prisoner is not really a spy story at all. Once the lead character is abducted from his flat and ensconced in the village, the narrative turns into an allegory of Man versus the State, the individual against the collective. None of the inhabitants of the village have a name, only a number and CCTV cameras watch their every move. However, unlike the sort of dank and dingy hell envisaged by Huxley and Orwell, this repressive society is brilliantly colourful and superficially attractive. The village Tannoy system broadcasts the ice cream flavour of the day, there is an old people’s home, free health care, social security and a labour exchange. Ersatz lounge music is piped into the inhabitants’ comfortable homes and the village brass band plays the Radetzky March in the square. Even phoney elections are occasionally held. The message is clear: if you conform and do as you are told, you can have a whale of a time in the village. McGoohan and Markstein were making a bold libertarian statement on the limits of European Social Democracy. This series would never have been made by the BBC.

McGoohan’s character is called Number Six by the village authorities, but he continues to insist “I am not a number. I am a free man.” At one point, one of his captors, angered by his continual defiance says “You’re a wicked man. Have you no values?” Number Six replies “Different values.” The village is run by a succession of Number Twos (played by the cream of British actors of the period) who represent transitory political leaders. Number One, the ultimate authority, is never fully revealed. The Swastika or Hammer and Sickle of this totalitarian society is a canopied penny-farthing bicycle, which we find emblazoned everywhere, from public buildings to the labels on tinned food. The village streets are patrolled by a large white weather balloon, Rover, which descends upon the inhabitants and smothers them, should they dare step out of line. Finally, the village has a diverse international community of different peoples. Nothing really knits them together, save their captivity.

Filmed between 1966 and 1967 in sumptuous 35mm colour, no expense was spared on its production. After a couple of months filming on location in Portmeirion, the crew moved to the MGM film studios in Borehamwood for the interiors. It is estimated that the whole series cost over £20 million in 2021 monetary value, making it one of the most expensive British television productions. Visually, the details added by Art Director Jack Shampan are stunning. The whole village has a uniform feel and great care was taken in designing costumes and props. The studio sets of Number Two’s office and the Control Room are particularly memorable and would not be out of place in a Bond film.

Despite all the efforts that had gone into production, much of the visual effect was lost on viewers, owing to the fact that colour broadcasting had not yet started in the UK. Faced with mounting costs, Lew Grade decided to cut the series short at 17 episodes. By this time, McGoohan had fallen out with Markstein, leading to the latter’s departure. Consequently, McGoohan, by now exhausted and on the verge of a breakdown, took charge of the final four episodes, which arguably were poorly structured and carried surrealism too far. The final instalment when broadcast in 1968 led to a public outcry.

The Prisoner gained a cult status in later decades with re-runs on television and home release. However, to conservatives and libertarians the programme holds a greater significance as the only British television series bold enough to express a different set of values to the stagnant, cultural-socialist agenda of the BBC. It certainly shows us a glimpse of a path not taken, where different talents, separate from the old Left clique, could have been given free rein. The Prisoner should also inspire us to what can be achieved in the future.

Televised press briefings are an ill-conceived American transplant that Britain should reject

29 Aug

Yesterday’s Times reported that Sky News and BBC News, the country’s two major 24-hour news channels, have refused to commit to broadcasting the Government’s new, televised press briefings every day.

The broadcasters are apparently sensitive of appearing to be giving excessive airtime to what amounts to a massive spinning exercise, and therefore say they will only commit to showing the footage ‘on merit’.

Really the only thing surprising about this is that someone in Downing Street might have thought it wouldn’t be the case. It would be extremely obliging of the main channels to cede so much broadcast real estate so cheaply.

But even with this sensible attitude in place, it seems inevitable that daily televised press conferences will have the same baleful impact on British politics as their US inspiration has had across the water. In lean times it gives Government spinners something else to bend the business of governing out of shape around, and when a crisis hits it risks devolving into a poisonous stand-off, with reporters competing to ‘look tough for the cameras’.

Even without the unpromising example of America, the auguries for this initiative aren’t good. Months of daily Covid-19 press briefings have provided ample demonstration of how these set pieces distort ministers’ priorities – recall the desperate scramble to appear to hit Matt Hancock’s ‘100,000 tests a day’ target.

But with the Prime Minister apparently determined to press ahead with this, are we doomed to see it become a permanent feature of British politics? It certainly could. As Daniel Finkelstein writes: “Once you’ve opened the door to the cameras, which press secretary is going to be the one who shuts it?”

The pressure in favour of the cameras is certainly strong. It is very unfashionable these days to suggest that the business of an institution like the lobby is better conducted behind closed doors. It’s much the same with Parliament: it isn’t obvious that televising the Chamber has improved the quality of what goes on inside it, but Heaven help the hero who tries to turn those cameras off again.

And for all their apparent even handedness now, in the end we can expect the broadcasters to throw their weight any change which increases their importance and gives them more material, as they have with that other unhappy American transplant, televised election debates.

But the example of debates also shows us how tricky it can be to import such rituals from one system to another. Whilst the format has lurched on through every general election since 2010, the reality of British multi-party politics has meant that there was no smooth standardisation of the three-leaders, three-debate format of that first contest. David Cameron, Theresa May, and even Boris Johnson have managed to fight effective rearguard actions against the format.

So the day may yet come when a future press secretary closes the door on the press briefings once again. As it should be.