Channel 4 was originally funded by subscription from ITV companies. This was due to a levy, financially restricting excess profits. Initially, ITV to meet the Levy, were placing the excess revenue in expensive salaries, and expensive programmes. ITV wanted a fourth channel so as to create more wealth. It was also at this time BBC2 was becoming a large tax, financially, for BBC. To beat the levy, ITV companies sold advertising time on C4 in their own region. As such C4 was a relatively cheaply funded channel and therefore more money could be spent on programmes.
From 1993 C4 became a public trust, with a board appointed by the Independent Television Commission, subject to government approval. Now C4 sells its own advertising time, but if revenues do slide below a specific point, ITV companies will be required to assist financially.
These were outlined in the Broadcasting Act in 1980. It required that the programmes contained an amount appealing not just to ITV viewers but also that a suitable proportion are of an educational nature; to encourage innovation and experiment in the form and content of programmes, and generally to give a distinctive character of its own.
Compared to other British TV companies Channel Four differs in its administration. Operating a role likened to that of a broadcasting publishing house; it doesn't produce its own programmes (except Right to Reply) and has no programme making staff on its payroll; almost all of its revenue can be spent on programme making. Commissioning Editors are responsible for spending the majority if C4’s money as most employees are independent programme makers or freelancers.
The centre of the Channel Four system is the Commissioning Editor. They remain a small group, effectively heads of output departments and responsible for major areas like drama, arts, education and current affairs output. These editors have enormous power that they have to delegate to other programme maker.
The first was a call for the new channel to operate outside the existing ‘duopoly’ of the BBC and IBA as a kind of publishing house, absolved of the normal requirements to produce a balanced evening’s viewing.
British broadcasting had become tedious, complacent and insipid and that the new channel should therefore be open to new voices and new ways of doing things; that it should be committed to experiment and innovation in both the form and content of programmes. ITV believed it had every right to the fourth channel, considering BBC got the third. This would then balance the channel system in Britain.
The new channel was to be regulated by the IBA and to be entirely financed by advertising revenue. However, the exact mechanism that was arrived at for collecting this revenue is significant – that ITV companies were allowed to sell the allocated advertising airtime on the new channel. Secondly, pay an annual subscription agreed with the IBA to meet Channel Four’s production and administrative costs. Since this subscription largely came out of the excess profits tax or ‘levy’ paid by the companies, ITV shareholders were carefully protected.
This method also had benefits for the Channel Four company, as it gave the channel a ‘breathing space’ until such time as its advertising revenue income might meet its programme production costs, and helped to encourage degree of corresponding scheduling policy as between ITV and Channel Four. So C4 and ITV balanced out BBC and BBC2 and the first time in British history there were two independent channels relying on advertising revenue.
In relation to positions in the company, Commissioning Editors carry a similar role to the relationship between producers and heads of output departments in the BBC. The difference is that independent producers dealing with channel four do not have anything like security or staff producers in the BBC, or in ITV. They also have to run and maintain a company in the knowledge that it may not outlive any series it is currently producing. Unlike the BBC, Channel four benefits from being small in size, by only employing around 230 people full time. It was set up to cater for much smaller, more specialist, and audiences. For the channel controllers and the CE’s, then, quality of audience was always going to be much more important. So as unlike before C4 is showing the benefits of targeting a smaller audience with fewer people in the company. In the Public Service Broadcasting, it has been more focused on the larger majority audience. It has also been the larger corporations with more employers and this is how C4 differs again.
Channel Four has introduced new concepts about the ways programmes can be developed and produced, and what their content may be; how far audiences can be taught positively to use television. Also how programmes can be separated before the notion of broadcasting to them becomes the wrong way to reach them. They developed a way transferring the ideas from drawing board to transmission, at a moderately low price. By adding repeats in peak time and despite keeping a strand of education in the early evening, channel four could resemble BBC2. This is important in relation to public service broadcasting because Channel Four was originally meant to resemble ITV and have similar content. Now it resembles a BBC channel. This could lead to other channels attempting to cross over into new audiences by taking on other channel’s likeable qualities.
The challenge of Channel Four was that it was able to demonstrate a form of public-service broadcasting financed, however indirectly, by advertising revenue. The challenge of commercialism was that the BBC began to see a future in which many aspects of commerce- like merchandising from programmes, or selling videos etc. Considering BBC funding has been from licensing, this is also important for financial purposes. BBC in the future, with such competition, will have trouble convincing audiences to keep paying for the licenses. So, as financing begins to change, it’s important for C4 to set the standard for advertising revenue. Even though advertising does not finance the BBC, merchandising could be the step in the right direction.
The introduction of C4 has been a significant development in British Broadcasting history. It is innovative, unique and entertaining. It combines many interesting programmes such as art television, television for young people; Film on 4; commissioning programmes from independent programme makers; while addressing diverse audiences in the process.
Channel four has significantly and usefully extended the range of political ideas and cultural formed available through television; and second, that it has introduced a new model of production that potentially facilitates the expression of this wide range of ideas.
Bibliography
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