Channel 4’s future is “sustainable”, provided it can still respond to market developments by keeping its commercial and regulatory flexibility, according to a new report.
The Ernst and Young study, which was commissioned by the UK broadcaster, said that Channel 4 has adapted well to market change in recent years, maintaining its portfolio viewing share following digital switchover, and keeping “robust revenue performances”.
It also credited the broadcaster for showing innovation by launching and continuing to develop its on-demand proposition and investing in its data strategy – enabling it to monetise the growing amount of on-demand viewing.
“Overall, Channel 4 has a track record of demonstrating flexibility and adaptability in the face of changing policy, consumption patterns, and economic conditions that impact on both short and mid-term profitability,” said the report.
“This stands it in good stead to deal with future challenges – and we expect Channel 4 to remain sustainable as a standalone business, assuming it retains its current flexibility and ability to adapt.”
Channel 4 commissioned the report after the UK government admitted in November that it is looking at privatising Channel 4, despite previously denying the option was on the table. Prime Minister David Cameron confirmed the channel, which is currently publicly-owned but commercially-funded, could be sold or part-privatised to secure Channel 4 “a strong and secure future”.
However, Channel 4 CEO David Abraham defended Channel 4’s existing public service model at a conference earlier this month, claiming that privatisation “is a solution in search of a problem.”
“Despite the concerns the government may have about our future, our model continues to work well because we keep innovating,” he said, claiming that Channel 4 is “not a burden” and “delivers public value at no direct cost to the taxpayer”.
He said: “I simply do not believe that the likes of C4 News, our Paralympics coverage, or our commitment to backing distinctive British films, would survive in anywhere near their current form if Channel 4 was privatised.”
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