Gideon Spanier: Channel 4 needs to think outside box to change radically

Channel 4 should not fear a change of ownership. The Government has been a good owner of what was Britain’s edgiest broadcaster when it was founded in 1982.

Yet it is far from certain that if it did not exist now, it would be invented as a state-owned, commercial but not-for-profit broadcaster with a public-service remit.

We enjoy a world of infinitely more choice than when there were just four channels — before cable and satellite TV and then the internet, smartphones and social media transformed the market place.

So the Conservatives are right to consider a change of ownership or some form of privatisation — even though it needed a snatched photo in Downing Street of an official clutching a document about Channel 4 “reform” last week to confirm it.

There is a lot to be said for challenging the status quo or what the Tories call, with a hint of derision, the “do nothing” approach after their attempts at reform were blocked by the Liberal Democrats in coalition.

The fact Channel 4 owns the freehold of its Victoria headquarters — valued at £85 million — is symbolic of an organisation that looks cosy sitting where it is.

Public ownership is meant to be Channel 4’s great virtue: a protective cushion that allows it to be independent, forget about profits and focus on its remit of being radical and taking risks with programming such as Benefits Street, The Undateables and This Is England.

But there is an argument this cushion, and the Ofcom regulation with it, prevent radical thinking.

Channel 4, estimated to be worth £1 billion, remains dependent on advertising, which generates the bulk of its £938 million-a-year turnover.

It has little involvement in pay-TV and virtually none in subscription, in contrast to commercial rivals from Sky to Netflix and Amazon.

A change of ownership could force it to be more entrepreneurial in finding alternative income streams, particularly as the resilience of TV advertising will come under strain as traditional viewing declines.

It could also borrow more debt for acquisitions — something its remit restricts at present. Perhaps this week’s ousting of chairman Lord Burns was evidence of new thinking.

Then there’s the international dimension. Channel 4 is proudly British — as David Abraham, chief executive since 2010, noted in last year’s MacTaggart Lecture to the Edinburgh TV Festival when he warned about US broadcasters buying up UK assets.

But Channel 4 should have global, not just national, ambition — as it already has in film-making in a small way with Film 4.

Virtually everyone from the BBC and ITV to YouTube and Vice is going international.

Yet Channel 4 is hampered by its remit, which means it commissions its TV shows from hundreds of independent production firms and owns only a part, and sometimes none, of the international rights.

Moving from not-for-profit to profit-seeking also need not pose a dire threat. Channel 4 makes much of how it reinvests any surplus back into programming, but my sense has been that running at break-even is an artificial mechanism.