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Channel 4 is a sin
While the UK government is trying to privatize channel 4, citing an unsustainable funding model, Omedia’s senior analyst, digital content and channels, Tim Westcott, is predicting how advertising revenue will grow in the next five years.
The UK government is preparing to sell Channel 4 as part of a new law to improve public service delivery (PSB). Channel 4, launched in 1982, is a privately owned corporation that receives all of its funding from advertising. In addition to the flagship channel, Channel 4 Corporation has air-to-air channels E4, More4, Film4 and 4seven. All 4 videos on demand service; And The Box Plus Network, a group of pay-TV music channels.
The main reason for the privatization of the Channel 4 financial model is the lack of sustainability in the ever-increasing competition. In addition, Channel 4 as a public corporation has been denied access to the capital required to invest in new technologies and programs. The government also wants to give Channel 4 its “ability to produce and sell its own content”.
According to press reports, investment firm JP Morgan has set a £ 2bn ($ 2.4bn) price tag on the distribution. Possible buyers are ITV, Sky, Warner Bros. Includes Discovery and Paramount.
Outside the government, there are few supporters of privatizing Channel 4, and opposition members of both houses of parliament are likely to pose a legal challenge to the resolution. The Channel 4 administration is preparing a detailed response to the legal consultation and opposes the proposals. The agreement, which represents free producers, warned that the proposals “would be very serious” and would hurt minor neutral groups in the UK.
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Digging into the numbers
Channel 4 did not publish its 2021 financial statements but said in response to the consultation that it had an estimated 1 1 billion ($ 1.25 billion) in revenue, which is more than ever. A.D. In 2020 — the year that advertising sales were reduced by the CVD-19 epidemic — Channel 4 reported a ትርፍ 734m profit of £ 736m. Omedia Advertising Intelligence Service predicts that Channel 4’s advertising revenue will continue to grow over the next five years, which is slightly larger than the market. Due to the declining revenue of online TV commercials, much of the improved overall performance is due to digital advertising, which has been successful in growing Channel 4, using a smaller audience.
Although Channel 4’s non-advertising revenue is small (more than 7% sales by 2020), the model’s vulnerability is weak. However, advertising seems to have made it a much less desirable purchase target. The debate over privatization is likely to shift some of the money spent on channel 4 to the distribution of profits by shareholders (most likely the UK Media Congress). And Channel 4’s promise to produce large quantities of original content, including production outside the London area, can also be taken seriously by the new owner. It is true that Channel 5, which has been owned by Paramount (now Viacom) since 2014, has seen an increase in not only its program quota commitments but also its investment investment. However, the commitment of Channel 5 is far less serious than that of Channel 4, and her ex-husband cut the cost of programming before it was sold.
This piece is taken from ‘The UK Government Plans To Sell Channel 4’, Written by Tim Westcott Senior Analyst for Digital Content and Channels and published by the Omedia Digital Content and Channels Intelligence Service.
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