MPs: 'Licence fee should fund C4'

The House of Commons Culture, Media and Sport Committee has recommended that Channel 4 should receive a proportion of the BBC licence fee in order to help solve its annual £150 million funding gap.

In a report published today, the Committee also said it favoured this approach to help Channel 4 – rather than proposals for a partnership between Channel 4 and the BBC’s commercial arm, BBC Worldwide.

The committee said that such a move would “be likely to make Worldwide an even more aggresively commercial organisation. Furthermore, we see no obvious synergy between Channel 4, which produces no content of its own, and Worldwide which is primarily a content distributor.”

From 2003/2004 to 2007/2008, profit margins at BBC Worldwide grew from £31million to £118million, through investments which include minority stakes in overseas production companies, acquiring the Lonely Planet brand and expanding its portfolio of magazines. BBC Worldwide is the third largest consumer magazine publisher in the UK.

The committee chairman, John Whittingdale, said that while the BBC was right to obtain the maximum value from its brand to reduce the pressure on the licence fee, the BBC should only undertake commercial activities where there was a clear link to its programming.

‘There is a balance to be drawn between generating a return for the BBC and preventing damage to its commercial competitors,’he said.

‘We believe that the balance has tipped too far in favour of BBC Worldwide’s expansion and we look to the BBC Trust to correct this.”

The committee objected to BBC Worldwide’s overseas publications, including its joint venture with The Times of India, to publish the magazines Grazia and Hello in India.

The impact has also been felt in the UK, the committee said.

The report notes that the launch of pre-teen football magazine, Match of the Day, 14 months ago, created unhealthy competition for existing title Match.

Long established title, Shoot! was ‘effectively closed as result of the BBC’launch into this sector of magazines, Signature Publishing said in evidence to MPs.

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