GMG: Channel 4 tie-up with BBC will harm competition

Guardian Media Group has voiced “serious concerns” about proposals to create a second public service broadcaster to rival the BBC.

In its response to the Government’s Digital Britain consultation, the publisher has warned that a joint venture between Channel 4 and BBC Worldwide would undermine commercial media’s attempts to make money online.

“We are concerned that, by focusing solely on maintaining Channel 4 as the primary counterbalance to the BBC, the Government may be jeopardising the ability of the commercial sector to develop its own public service content,” GMG said.

“It is likely that commercial operators will try to avoid direct competition with the [new public service broadcaster] in the online world.

“The potential revenues available to commercial players will be reduced, as will their ability to invest in online development.

“Paradoxically, the creation of a second public service broadcaster may therefore actually deliver less, rather than more.”

GMG said there was already evidence that commercial news groups tried to avoid direct competition with the BBC online. It said this problem would be exacerbated if a second public service broadcaster was set up.

Instead, it said a “commercially led” approach was preferable. The group backed Ofcom’s proposal to create local consortia, backed by contestable funding, to provide regional news.

GMG said that although it welcomed the BBC’s partnership proposals with ITV and the newspaper industry, it was not optimistic that these would work.

“Our experience of attempting to partner with the BBC is that despite encouraging conversations and positive intentions on both sides, the culture of the BBC acts as an inherent, institutional barrier to effective partnership,” it said.

“For all the admirable public service values of the BBC, at root it is set up to compete – and to win.”

The publisher also voiced concern about the growing power of search engines and news aggregators.

“The most successful online business models effectively involve searching and aggregating content, rather than creating content,” it said.

“There remains no viable model for players such as guardian.co.uk to take revenue directly from consumers in return for content – not least because of the presence of the BBC and the vast quantities of free content it publishes on bbc.co.uk.”

Communications minister Stephen Carter is expected to produce his final Digital Britain report – examining the future of public service media and technology – in the summer.

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