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Channel 4 'must form partnership' Channel 4 'must form partnership'
(about 1 hour later)
Channel 4 should become part of a bigger organisation through a merger or partnerships, Ofcom has recommended.Channel 4 should become part of a bigger organisation through a merger or partnerships, Ofcom has recommended.
The media regulator has suggested in a report that the channel, which faces a funding shortfall of £150m, could merge with Five or BBC Worldwide.The media regulator has suggested in a report that the channel, which faces a funding shortfall of £150m, could merge with Five or BBC Worldwide.
This would ensure that the channel was a strong alternative public service broadcaster to the BBC.This would ensure that the channel was a strong alternative public service broadcaster to the BBC.
Finding new ways of providing high quality regional news on channels other then BBC was also key, it said. Finding new ways of providing high quality regional news on channels other than the BBC was also key, it said.
Ofcom chief executive Ed Richards told the BBC that it was important the corporation was not the UK's sole public broadcaster, and that Channel 4, "with its strong track record", could provide an alternative service. We're in discussions with BBC Worldwide at the moment and they're really very exciting Andy DuncanChannel 4
He said the traditional broadcasting model - with the BBC funded by the licence fee and commercial channels funded by advertising - was "broken". Ofcom chief executive Ed Richards said audiences wanted a strong alternative public broadcaster to the BBC.
In order to provide viewers with a choice of public service broadcasters, the industry needed to change, he said. Channel 4, "with its strong track record", should be at the heart of that service but, because of its funding shortfall, change was needed, Mr Richards added.
"Our preference it to try to secure that through partnerships, joint ventures or even a merger." "Our preference is to try to secure that through partnerships, joint ventures or even a merger," he told BBC News.
Cash shortfall Channel 4 chief executive Andy Duncan said a partnership with BBC Worldwide, the corporation's commercial arm, was "the preferred option".
Ofcom's report examined structural changes in the commercial broadcasting sector, including the digital switchover in 2012 and pressures on television advertising. READ OFCOM REPORT IN FULL class="" href="http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/21_01_09ofcomreport.pdf">Putting Viewers First [1.17KB] Most computers will open this document automatically, but you may need Adobe Reader href="http://www.adobe.com/products/acrobat/readstep2.html">Download the reader here
It estimated this will leave a shortfall in funding for commercial TV of up to £235m a year by 2012. "We're in discussions with BBC Worldwide at the moment and they're really very exciting.
The report suggested that unused cash allocated to digital switchover before 2012, and surplus licence fee money after then were "both credible funding options". "Where you have got an alignment of interests in two companies, BBC Worldwide and Channel 4, both generate income commercially to put back into content for the benefit of the public," he told BBC News.
Ofcom said the key was not to prop up Channel 4 for its own sake but to ensure there was a viable institution apart from the BBC that would provide public service content that the market would not. But a merger with Five, which is part of a German-owned media conglomerate, would be "like mixing oil and water", he said.
ITV should be an essentially commercial network, Ofcom said, but should retain a "modest but important public service commitment" to news and UK content. "We are there for public purpose, Five is owned by RTL to maximise profits for their shareholders."
Its regional structure was probably unsustainable, the report found. Ofcom said ITV and Five should be "strong commercial networks making entertaining, engaging UK content including national and international news, but with limited public service commitments".
Public service
FROM THE TODAY PROGRAMME More from Today programmeFROM THE TODAY PROGRAMME More from Today programme
The BBC had offered to share some newsgathering resources with ITV, but Ofcom said the government needed to create an alternative plan to secure the long-term future of local news around the UK.The BBC had offered to share some newsgathering resources with ITV, but Ofcom said the government needed to create an alternative plan to secure the long-term future of local news around the UK.
It suggested the establishment of independently funded bodies to provide regional news, at a cost of up to £50 million. It suggested the establishment of independently-funded bodies to provide regional news, at a cost of up to £50m.
Channel 4's chief executive, Andy Duncan, told the BBC a merged company "with Channel 4 at its heart" would provide financial stability and safeguard public service broadcasting. It is likely that news produced by such new bodies would still be aired on ITV.
He said: "In five, 10 years' time, we want in Britain the BBC and one other strong organisation providing public service broadcasting in this country. Ofcom also said that:
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  • The traditional broadcasting model - with the BBC funded by the licence fee and commercial channels funded by advertising - was no longer sustainable
  • The commercial broadcasting sector was going through significant structural changes, including the digital switchover in 2012 and pressures on television advertising
  • This would leave an estimated shortfall in funding for commercial TV of up to £235m a year by 2012
  • It was rejecting plans for the BBC to give its existing licence fee money to other broadcasters
  • But using money from the licence fee which is currently allocated to help with switching to digital TV was a "credible funding option"
  • As well as local and national news, children's programming in the UK was also under threat
  • The government should therefore consider specific additional funding for children's programming, it said
"We don't want to have a situation where we're only reliant on the BBC - good as it is - because I don't think that's good for the public and I don't think it's good for the BBC." Ofcom said decisions on many of the issues raised were "needed within the next year".
"We recognise that difficult choices will need to be made about the use of scarce resources," the report added.