Question to the Department for Digital, Culture, Media & Sport:

To ask the Secretary of State for Digital, Culture, Media and Sport, what assessment her Department has made of the financial impact of Channel 4 on the independent television production sector.

The Government consulted extensively on the future of Channel 4, and the views and evidence gathered from a wide range of stakeholders has informed the Government’s assessment of any potential impact of a change of ownership. The Government published its sale impact analysis on 28 April.

Channel 4 has done an excellent job in supporting the UK production sector and thereby delivering on one of its founding purposes. Forty years on, independent production in the UK is now booming, with revenues having grown from £500 million in 1995 to £3 billion in 2019. Companies are increasingly less reliant on Channel 4 for commissions. According to Pact’s 2020 census, only 7 per cent of the UK’s independent production sector revenues come from Channel 4 commissions.

More broadly, the independent production sector is now a mature industry, driven principally by medium sized and larger companies. The majority of revenues flow to a relatively small group of large companies in the independent production sector. Pact’s figures suggest that 63 per cent of sector revenues were captured by companies with £25m+ revenues in 2020, and 34 per cent of revenues were captured by companies with £70m+ revenues.

Under new ownership, Channel 4 will still be required to commission a minimum volume of its programming from independent producers, in line with the quotas placed on other public service broadcasters, ensuring its continued contribution to the sector.

Channel 4 has excellent relationships with independent producers right across the UK and there is no reason this should change. The Government expects a new owner to want to build on and develop those relationships. Ultimately, the Government believes that in the long run the UK production ecosystem will benefit from a more sustainable Channel 4. A change of ownership that improves Channel 4’s access to capital could increase spending on production. For example, Channel 5’s overall content budget increased following its acquisition by Viacom in 2014, with first-run spending up by an average of 7% per year between 2014 and 2018.