Channel 4 slashes budget for U.S. productions


LONDON -- Channel 4 is scaling back spending on U.S. acquisitions by 20% over the next five years as part of wide-ranging plans to foster more British creative talent, chief executive Andy Duncan said Thursday.

Before an audience of regulators, politicians, academics and journalists, Duncan unveiled a major new public-service blueprint -- dubbed Next on Four -- that will call for an estimated 150 million pounds ($304.4 million) a year of subsidies to bridge a future funding gap.

Duncan declined to discuss specifics of how the gap could be bridged, saying that was "a matter for government" to decide.

"This has been the most extensive review of our public purpose in Channel 4's history," Duncan said. "We will need (public) policy support to allow us to deliver this blueprint."

Duncan said Channel 4 will launch a 50 million pound ($101.5 million) fund to invest in public service digital media content and commit 10 million pounds ($20.3 million) a year toward programming targeted at 10- to 15-year-olds.

The broadcaster, which celebrated its 25th anniversary in 2007, also plans to refocus its content by scaling back its studio acquisitions by about 20% to about 35 million pounds ($71.1 million) a year over the next five years, then use the cash to deliver more homegrown product.

"U.S. fare is no longer cost effective for us to buy," director of television Kevin Lygo said. "We'll still try to buy the best series, but we will buy less volume and spend less money."

U.K. media regulator Ofcom is undertaking its own review of Channel 4's funding position, which is due to outline possible funding options for the government-owned broadcaster by as early as April.

Speaking at the Next on Four launch, Ofcom chief executive Ed Richards said he welcomes the broadcaster's creative focus and said Channel 4 plays a "fundamental role" in British broadcasting.

"If you believe in Channel 4, then you have to start thinking about the means," he said. "There are a range of ways to facilitate this problem, but they need to be thought out very clearly."

One possible source of funding would be direct access to the BBC's license fee, a per-household viewing tax that raises 3.3 billion pounds ($6.7 billion) a year to finance the BBC's television and radio programming.

But such a move would trigger a significant fight with the pubcaster -- one that Channel 4 executives will be keen to avoid. Another possibility could be an indirect subsidy in the form of free digital spectrum, something the regulator is exploring.

The government is carrying out a separate review into the U.K. public service broadcasting market and expected to decide on how to finance Channel 4 by the middle of next year.