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BBC boss in favour of four/five merger

By | Published on Tuesday 13 January 2009

The boss of the BBC has said that a merger between Channel 4 and Five should not be ruled out as a way of helping public service broadcasting in the commercial sector add up.

As much previously reported, OfCom is currently looking into the public service obligations of the terrestrial commercial broadcasters – ITV, C4 and Five – and whether said obligations should be reduced or funded in a non-commercial way given the increased competition in the advertising market and the impact it is having on the traditional TV channel’s revenues.

State-owned Channel 4 is the biggest issue because public service programming is its reason for being, and management there say they need help maintaining those services because advertising and sponsorship alone is not enough.

The simplest solution, favoured by some at C4, would be to give the commercial channel a cut of the licence fee money. Needless to say the BBC don’t like that idea at all, and have been busy suggesting other ways C4 could generate new revenues or cut their costs.

The proposal of merging state-owned Channel 4 and privately-owned Five has been mooted on a number of occasions – the logic being the merger would cut the costs of both parties – and if C4 shunted its mainstream shows onto Five it would create a hugely profitable commercial channel that could subsidise C4’s public service programming.

However, there would be a number of challenges to such a merger, not least possible Competition Commission concerns. Media analysts Enders recently said they thought that the Commission would have a number of concerns of the dominance of a merged C4/Five in the commercial TV market.

But writing in the Financial Times, BBC boss Mark Thompson, obviously a fan of all proposals that would ensure his organisation kept all the licence fee money, said: “Consolidation [of Channel 4 and five] could offer the prospect of both short and long-term benefits: immediate cost savings and an increase in scale in key markets from advertising sales to programme acquisition, but also the chance for a smaller number of larger players to focus on credible and affordable digital plans. If the goal is sustainable PSB beyond the BBC in the long term, consolidation may be part of the solution”.