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

(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.

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

The government also said it will consult on ways to plug gaps in the rules for on-demand video providers. Apple TV+ and Netflix are not regulated in the U.K., while online video from the British Broadcasting Corp. is subject to a code overseen by media watchdog Ofcom. 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.

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 is required to reinvest its profits back into programming.

It’s 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.”

Channel 4 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 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.

It earned revenue of 934 million pounds in the 2019 financial year, mainly from advertising.

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