Channel 4 future's bleak, says Ofcom

Regulator says future's grim without investment

19 September 2008 15:25 GMT / By Katie Scott

Ofcom chief exec Ed Richards has told journos that C4's future may be bleak unless the TV outfit gets some serious funding.

Richards made the statement before a speech at the Royal Television Society, revealing that C4 could face an annual deficit of £100m by 2012 if drastic action is not taken.

Edwards is supporting a move that would see C4 given some of the money from the national TV license, which all TV owners pay, but currently only goes to the BBC.

Richards argues that giving some of the funds to C4 would allow the channel to continue to play "a significant public service role in the digital age".

Richards added: "To break even, Channel 4 would need to cut its investment in public service content year-on-year from here to 2012 to the detriment of the public service content that audiences tell us they value".

"We have subjected these projections to close scrutiny and, while we are not as pessimistic as C4 itself, we do believe that this annual deficit could amount to between £60m and £100m by 2012, excluding the costs of the Next on 4 vision.

"In principle Channel 4 could simply spend its reserves to sustain short-term investment in public service content. But no sane business would run through its savings to fund unsustainable outgoings without some security of its future income."

"Channel 4 should have a significant public service role in the digital age, building on its current contribution as a publicly owned not for profit institution. It needs an economic model and funding mechanism to support this as a pressing priority."

Andy Duncan, chief executive of Channel 4, commented in response: "We’re very encouraged that Ofcom now broadly accepts our forecasts on the size and urgency of our funding gap and agrees that identifying a new funding mechanism for Channel 4 is a "pressing priority".