Within the wake of Sky’s landmark acquisition of rival public broadcaster ITV, the brand new BBC boss has revealed that the corporate is in conversation with Channel 4 about potentially combining their streaming services.
Matt Brittin, who took over from former BBC director-general Tim Davie in May this 12 months, faced politicians at a U.K. parliament culture committee on Wednesday, where he detailed the need of a British “sovereign platform” that may rival U.S. tech giants like YouTube and Netflix.
It comes just two days after the news that Sky can be buying ITV for £1.6 billion. And a combined Comcast-owned Sky and ITV would create a formidable British media group within the face of a mass audience shift to digital platforms and streamers, nevertheless it’ll also actually put fellow cash-strapped PSBs on their toes.
“We now have had an approach and have had a discussion with Channel 4,” said ex-Google exec Brittin to MPs. “On the earth of the ITV-Sky merger, Channel 4 looks very sub-scale. All of those mergers are driven by the necessity to have scale. One opportunity for them can be in partnership with the BBC, having content on iPlayer, but continuing to be ad-funded.”
“There are an array of economic, audience, public service, and technical issues,” he continued, “but what we’ll do is explore that as quickly as we’re able, because I believe that’s something that’s going to be necessary for public service media… This can be a moment of real jeopardy,” Brittin added, “due to the size and due to influence of a handful of U.S. and Chinese tech players [which] will dominate the creation and distribution of content.”
Just last month, the BBC — the U.K.’s largest PSB — announced it might be slashing its content spend by $107 million and cutting 550 jobs. Brittin, seemingly wanting to confront the corporate’s financial uncertainty head-on, broke the news in a memo to BBC staff. He has spoken plainly since getting the highest job concerning the need for “real risk, yet also real opportunity,” in order that the BBC may “thrive as a public service fit for the longer term.”
Channel 4 is a smaller operation than the Beeb, and news of the Sky-ITV deal will only prompt more speculation over its future and capability to compete in an already-oversaturated market. While a streamer team-up with the BBC could be on the table, Channel 4 CEO Priya Dogra shut down the chance as recently as May while talking on the Creative Cities Convention. “I used to be in mergers and acquisitions for a very long time,” she said. And the thing you learn is that there aren’t any mergers. There are only acquisitions. Someone is at all times buying another person and from my seat, that’s the mistaken answer for Channel 4, because it might just mean Channel 4 gets subsumed into one other organization.”
The PSBs have long complained about streaming services reminiscent of Netflix, Prime Video and Disney+ dominating the industry. A streaming levy had been put to the federal government in a bid to salvage local British production on high-end television and film, allowing public service broadcasters reminiscent of the BBC and ITV to claw back among the finance hogged by streamers, nevertheless it was rejected in July last 12 months.
Juliane Althoff, film and TV lawyer and partner on the London-based media and entertainment law firm Simkins LLP, said a partnership between the BBC and Channel 4 would make for an additional “shake-up” within the U.K. broadcasting landscape.
“The challenge wouldn’t be simply constructing an even bigger streaming service,” she said. “The BBC and Channel 4 have distinct public service remits, and any joint platform would wish to preserve those obligations relatively than dilute them in pursuit of economic growth. For public service broadcasters, collaboration is less about beating the likes of Netflix and more about ensuring British content doesn’t wander off in an increasingly crowded global marketplace.”
The businesses face obstacles reminiscent of program rights, re-negotiation on licensing deals, and their opposing governance structures and regulatory obligations, she added. Even ITV CEO Carolyn McCall confessed she doesn’t expect it is going to be easy to persuade regulators to approve the Sky-ITV merger, and said antitrust scrutiny can be rigorous. “We expect a really thorough and comprehensive review [of the deal]. Which we expect will go to phase 2,” said McCall, noting that approval could take between 12 to 18 months.”
The Hollywood Reporter has approached Channel 4 for comment.