U.K. Weighs Selling Channel 4 Amid Streaming Rules Shakeup

(Bloomberg) -- The U.K. will consider a sale of state-owned broadcaster Channel 4 Television Corp. and new regulations for streaming services like Netflix Inc. in a major shakeup of the government’s role in television.

The government will consult on Channel 4’s ownership and remit, and is set to publish findings later in the year, the Department for Digital, Culture, Media and Sport said in a statement on Wednesday. Ministers previously looked at selling the company in 2016.

“Moving Channel 4 into private ownership could allow it to access new capital, create strategic partnerships, and reach international markets only available through the private sector,” DCMS said in the statement.

The DCMS also said it will consult on ways to plug gaps in the rules for on-demand video providers. The British Broadcasting Corp. is subject to a code overseen by U.K. media watchdog Ofcom, while Apple TV+ and Netflix aren’t regulated in the same way as traditional broadcasters. That leaves “an inconsistent, ad-hoc and potentially harmful gap in regulation between video-on-demand services, alongside a potential competitive disadvantage,” DCMS said in the statement.

A spokesperson for Netflix declined to comment. A representative for Apple didn’t immediately respond to a request for comment.

Channel 4’s reliance on ad funding makes it vulnerable to an industry that’s migrating away from traditional, linear TV, the government said. The free-to-air channel was set up by Margaret Thatcher in 1982 to stimulate Britain’s entertainment sector by investing in local talent. It’s launched shows like “Black Mirror” and “Peep Show” and is required to reinvest its profits back into programming.

The broadcaster could fetch more than 1 billion pounds ($1.4 billion) if the government removed some of its public service obligations and provided more clarity about what regulation would look like in the coming years, according to Claire Enders, founder of Enders Analysis. The business doesn’t own the original intellectual property assets -- which are driving the current wave of media mergers with deals like Discovery’s tie-up with Time Warner -- instead leaving those rights with independent producers such as Endemol Shine Group.

Channel 4 has recently attracted criticism from members of the country’s ruling Conservative government, who have challenged its take on current affairs and called its approach “left wing.” The government’s political rivals have opposed a sale.

The Labour party’s culture spokeswoman Jo Stevens said the government is “looking for a short term-cash boost by selling off one of our great British assets to the highest foreign bidder” after wasting money elsewhere.

A separate report by Enders analysts published Tuesday called the consultation “potentially spiteful” and “removed from any cohesive strategy” for the sector. A DCMS spokesman didn’t immediately respond to a request for comment.

Writing in the Times newspaper Wednesday, Culture Secretary Oliver Dowden said an alternative ownership model “where it keeps its public service remit” may be better for the company and the U.K.

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