Why privatising Channel 4 will impoverish us all

The fate of the broadcaster is about more than industry. It's about moral life, says Anthony Smith
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Every year, in tandem with the public arts festival in Edinburgh, there is a television conference for paying guests attended by everybody who is anybody in UK television. One issue that is hanging over the television festival this year (and which will be formally debated on Monday) is whether the Government will include a commitment in its election manifesto to privatise Channel 4 - or, indeed, whether Tony Blair himself might look to selling off Channel 4 as a possible honeypot.

Channel 4 is a commercial organisation that occupies a public space. Its continued existence is richly justified by its record and by a set of criteria that have become unfashionable in the 1990s mood. It can serve minorities; it can ignore majorities; it can experiment in any direction it believes right; it can fail and fail again with projects; it can offend anyone; it can be unpredictable; and it can invent its own criteria of success.

Moreover, it can, if it wishes, cock a snook at such sacred cows as news values, ratings success, the star system. It can give its main slots to novices and let them find their feet. It can back new ideas until they succeed. Of course, the BBC can and should pursue somewhat similar policies, but the corporation has also the wider remit to serve the mainstream audience with mainstream material and has unfortunately largely forgotten that it possesses the luxury of cultural freedom. All the same, it was the presence of Channel 4 that revived BBC2 after some dull years in the 1980s.

We, in Britain, have managed to preserve, despite auctions for franchises, despite the breaking of the ITV monopoly of advertising, despite the advent of the competition-inducing Independent Television Commission, a commercial television system in which each competitor pursues a different mission, in the case of Channel 4 a completely different mission. This is very far from, say, the competitive pattern of the United States. Unfortunately, the last round of broadcasting legislation left the ITV companies in a cannibalistic feeding frenzy and the result has been precisely the kind of disaster that was predicted. The money available for programme-making has been squeezed relative to the total income available to the companies, because the reformed auction-founded franchises are liable to corporate takeover and encouraged towards every possible economy of scale.

There is less and less "waste" in the system, but it was the excess of facilities and cash over immediate need that helped British commercial broadcasting to flourish during much of its 35-year history. Today Channel 4 enjoys the privilege of being able to generate more income than it needs for survival; and moreover, unlike the old ITV, it has no shareholders looking for massive dividend hand-outs every year. Its umbilical cord to the ITV system now severed, Channel 4 has become the more prosperous of the entities, with no City analysts to keep happy - only the programme- makers, the audiences and the advertisers. It has come through its first 15 years, including one major structural change, rather triumphantly.

Channel 4's tentacles reach out into our society in the most interesting and creative ways. It competes for audiences, but it has also constructed new constituencies within the general audience. Moreover, its special remit to "innovate", to extend viewer choice and encourage diversity, has meant that it has influenced the rest of our television broadcasting over the last 10 or more years in the most constructive ways. Its early history was chock-a-block with innovation: from the creation of the "video box" for viewers' comments, and the relaying of news programmes direct from Ireland, to the screening of such thought-to-be untelevisable feature films as Derek Jarman's Sebastiane.

Channel 4 is constituted in such a way as to require constant critical approval, but with something of a separation between that approval and its revenue flow. With the only national advertising signal in British terrestrial television, it has a plentiful source of revenue. It boasts in successive annual reports of the incremental growth in its advertising revenue, but if its board so desired it could aim at collecting the minimum necessary to cover the costs of its programme plans, for there are no tycoons leaning over it, no hungry pension funds, no importunate investors.

In 1993 its net profit was pounds 38.9m and a year later pounds 83.6m. It has recently reported a figure of pounds 128.1m for 1995. In those three years, ITV's collective profits mounted from pounds 150m to pounds 350m, and the total capitalisation of these internecine money-spinners is now about pounds 11bn. And yet the ITV companies, in what Sir Michael Bishop has described as "rogue arrangements", continue to receive a hefty annual share of Channel 4's surplus, and they will continue to draw this curiously conceived payment for several years to come.

These commercial companies somehow convinced a naive government that they required this as compensation for the costs, borne by their predecessors, of setting up Channel 4 in the early 1980s. But in practice Channel 4 was going to become extremely rich extremely rapidly and needed no special protection of this kind. Nor do the ITV companies.

Both institutions, in fact, are excellent candidates for Mr Blair's public utility levy. And both would be encouraged by this thought to spend their surpluses and excess profits on programme-making; and thereafter contribute to the other cultural and educational causes which, in the long run, will provide the material for future television programmes. The advent of multi-channel digital television might in the course of time exert a downward pressure on these streams of revenue, as might cable and satellite, but these anxieties can be placed in the more distant future.

I do not wish to give the impression that I think Channel 4 has fully exploited its own freedoms and opportunities, nor that it has used them always unfailingly wisely. I am among those who feels angry and disappointed with much of the channel's output; for example it seems to be buying in a great deal of make-weight stuff which might have been better left on the shelves of the international television trade fairs. It has neglected, in my view, its duty of scouring the country (and the international scene) for new talent and new ideas - even though its chief executive boasts that "No one can match Channel 4's record for spotting and developing talent."

That has been true, but the channel has quietly dropped nearly all of the really innovating programme sources of its earlier years, such as the regional workshops. Alan Fountain, the commissioning editor who really searched every highway and byway for interesting ideas and people, has never been replaced and the channel has continued to live on much of the talent that it developed in the Isaacs era. It has gradually shifted its emphasis towards evident success and away from the Northwest Frontier of experiment, where it used to stand as sentinel, protector and patron.

Like many who pressed for something like the present Channel 4 system to be set up, I would wish the stricter and traditional interpretation of the remit to be restored. But the reorganisation of the channel as a floated privatised commercial company would do nothing at all to help guarantee the remit which Parliament laid down.

Think of what privatisation would open up. First the possibility of corporate takeover, subject to the ITC rules of the moment. With complete or even partial ownership by a foreign company, how would the subtleties of the commitment to innovate and encourage diversity be guaranteed?

The special role of the channel in the last resort is guaranteed by the people who run it and work the commissioning system, and the level of their personal dedication to it as a cultural cause. Does anyone seriously believe that that sense of institutional selfhood could survive the haphazard circumstances arising from a now-you-see-them-now-you-don't form of higher management?

But the greatest danger is the very one that the ITV companies have undergone - and not survived - which is the danger to the sheer quantity of cash available for the commissioning of programmes, the very heart of Channel 4's operation. The only kind of constraint upon the channel that benefits the public is one that makes it move every penny possible from its own corporate to its programme budgets. Privatisation would at a stroke provide a vast outward sluice for the channel's advertising income and would force it to compete on all-too-even playing field with the other companies currently struggling in the commercial television field.

It might be argued that Parliament could lay down the proportions of revenue that would have to be spent on stated kinds of programmes, but that is no substitute for a channel constituted to carry out a given cultural mission and finds its own way to do so.

The cancer of greed that has swept over so much of the public scene in Britain has not left the people who work in the media immune to its destructive effects. Many of the people who entered the lists as social experimenters and industry innovators when Channel 4 set up its first team of commissioning editors have been encouraged to abandon the drive towards public purpose in what they do professionally.

We live in a money-grubbing era. Many are unwilling to help others in the ways that they were themselves helped by Channel 4 into the moving image industry. The bottom-line reason for saving Channel 4 from the privatisers is therefore a social one. This has become a hopeless and beliefless society. Channel 4 could act as the forum for a new debate which surely needs to be held about how we can as a society become morally alive again.

The writer is the president of Magdalen College, Oxford, and was a founding director of Channel 4