Key facts
- Britain's BBC and Channel 4 have held preliminary talks with the government about a broader tie-up of some operations.
- One option under discussion would combine Channel 4's advertising operations, channels including E4 and Film4, and its video-on-demand services with UKTV, a commercial subsidiary of the BBC.
- A merged entity could be equally owned by the BBC and Channel 4.
- The joint venture would not include the Channel 4 flagship broadcast channel.
- The move aims to cut costs and secure the future of public broadcasters.
- Channel 4 is government-owned but funded by advertisements, while the BBC is mainly funded by a license fee.
Britain's BBC and Channel 4 have held preliminary talks with the government about a broader tie-up of some operations, two people with direct knowledge of the discussions told Reuters. The potential shake-up aims to cut costs and secure the future of the public broadcasters as linear viewing declines and larger streaming companies capture more global advertising spend.
One option under discussion would combine Channel 4's advertising operations, channels including E4 and Film4, and its video-on-demand services, with UKTV, a commercial subsidiary of the BBC. A merged entity could be equally owned by the BBC and Channel 4, representing a broader tie-up than previously indicated by BBC Director General Matt Brittin to include Channel 4 content in the BBC's iPlayer. The joint venture under consideration would not include the Channel 4 flagship broadcast channel, which could benefit from fees from the joint venture.
The talks could intensify next year depending on the BBC's progress towards a new funding deal with the government. Channel 4 is government-owned but funded by advertisements, while the publicly owned BBC is mainly funded by a license fee paid by TV-watching households. The talks involve UK Government Investments (UKGI), the entity responsible for managing publicly owned assets such as Channel 4.
Claire Enders, founder and chief executive of Enders Analysis, described the idea of a tie-up between BBC Studios and Channel 4 as "a perennial that flowered every so often," but noted that Channel 4 is not a failing firm. Channel 4 CEO Priya Dogra has already taken steps to improve its financial footing, such as winning Skydance-owned Channel 5's advertising sales business.
The BBC announced in June it would cut 550 jobs as part of plans to save 500 million pounds ($661 million) over the next three years. Channel 4 said last month it would cut about 340 jobs, representing more than a quarter of its workforce, in one of the biggest rounds of redundancies in its 43-year history.