Report predicts downfall for network

LONDON — A report commissioned by Brit media regulator Ofcom predicts a dire future for Channel 4.

The review predicts the broadcaster is likely to go into the red beyond 2010, forcing it to make some tough decisions about future editorial strategy regarding its public-service content and more commercial priorities.

While Channel 4’s recent commercial performance had been impressive, it is likely to deteriorate in the near future as competition for content intensifies uncertainty in the advertising market and threats from new media affect the bottom line.

Report said the broadcaster, a publicly owned corporation charged with providing a more varied diet than U.K. private webs but funded by advertising, is likely to generating losses by 2009.

Ofcom pointed out that in the past five years, Channel 4 has adopted a less rigorously public-service approach, screening fewer hours of Brit-produced fare.

At the same time, the expenditure on U.S. shows had increased, partly because of program inflation.

The report, by consultancy LEK, was commissioned by Ofcom as part of its review of Channel 4’s finances and is likely to do the broadcaster no harm in arguing for some form of public subsidy from the British government.

Channel 4, whose CEO, Andy Duncan, is campaigning for financial help because of what he perceives is a “funding gap” as the U.K. prepares for digital switchover, welcomed the report.

In a statement, Duncan said: “In our view, this report makes clear that it’s no longer a question of if Channel 4 needs new forms of public support to replace our gifted analog spectrum, which is rapidly declining in value, but when.

“We believe Ofcom should now progress to identifying appropriate new forms of support that will give Channel 4 a secure financial base from which to plan our future strategy and public-service contribution.”

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