The notion of an ITV swoop on Channel 4 makes for a good narrative. Creating a national champion, with a public service mandate and offering competition to US broadcasters, has keen support on Downing Street.
But the pathway from the exploratory tweet by the Culture Secretary, Nadine Dorries, to a stock market listing or a trade sale for the channel is littered with complications.
As a public company, ITV has UK ‘long’ investors not known for adventurism to consider. When ITV recently announced an extra £200m investment on building and promoting a home-grown streaming platform ITVX, it received a thumbs-down from the City.
Channel 4 is set to be privatised under Government plans announced this week
The lack of imagination among share-holders is stunning when one considers that £200m is the kind of production budget spent by Netflix on commissioning a high-end series such as The Crown.
A combination of ITV and C4 would offer opportunities for cost-cutting, including elimination of a head office, and combining IT and studio facilities.
It would increase bargaining power in buying in programmes from independent operators. Just-arrived ITV chairman Andrew Cosslett would be foolish not to keep a close eye on the opportunity.
There is no case for C4 remaining in Government ownership in a free market economy. Licence payers already support one big beast in the BBC, and C4 should be cut loose.
As significant as ownership, will be regulation. C4, ITV and the BBC need a better deal from the upcoming media bill.
Smart TV sets and streaming have placed them at extreme disadvantage in attracting viewers. It requires five or six clicks on the handset to find the UK channels with a public service remit in the prevailing ‘tile’ system of displays. The more common Sky index doesn’t make it easy either. Newcomers to our screens, be they Netflix, Disney+ or Amazon Prime, must be required to play by the same rules.
Broadcasters will be listening carefully to the Queen’s Speech for detail on the bill which, after scrutiny, could struggle to make it onto the statute books in 2023.
Even if it does that won’t be the end of matters should there be a bidding war or trade sale of ITV. Any buyer from the UK or overseas would need to be given the green light by Ofcom.
If it were to be ITV, the Competition and Markets Authority, which sets the rules for advertising on commercial TV, would look at aspects of a deal combining C4 with ITV. Sky or others would face similar hurdles.
Netflix, Comcast (owners of Sky) et al have demonstrated faith in the UK’s creative industries by powerful investment in new studios, stages and post-production.
Nevertheless, any buyer would need to satisfy the authorities that there would be no loss of C4’s original content, presently farmed out to independent producers.
Sometimes you wonder about the real free market instincts of the Government.
With one hand it seeks to set C4 free, and with the other wants to buy out the National Grid role in managing UK energy supply.
Ahead of today’s expected energy strategy, the Government has revealed that it will create a ‘future system operator’ to oversee Britain’s transition from fossil fuels.
National Grid is currently responsible for keeping the lights on and industry working by balancing supply and demand.
Rival energy companies complain that the Grid has a conflict of interest as the distribution hub for gas and electricity.
But creating a new quango, when Ofgem already is the regulator, does not measure up to Tory promises of a bonfire of red tape, post-Brexit.
Buying out the Grid’s administrative role should not be that expensive. Analysts estimate its value at £300m. Compared to the estimated £2bn rescue of insolvent supplier Bulb, this looks like a bargain.
Doubling up on regulators and renationalising would be an unforced error.
Shed a tear for the tech behemoths. The European Union is no friend of Silicon Valley. There is resentment that there has been a failure on this side of the Atlantic to re-create the ubiquitous success.
In its latest assault, the EU will require online firms to pay the costs of policing their content, with a fee that doesn’t exceed 0.1pc of global income. The initial levy is estimated to raise just £25m.
From small beginnings…
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