Elstein urges radical overhaul of Channel 4

Elstein, who was delivering the Institute of Economic Affairs Beesley lecture yesterday (24 September), called for Channel 4's board to be replaced, with new governance systems and a new remit. He argued that, today, C4 was "a small public service dog being wagged by a very large commercial tail", pointing out that the broadcaster spent only £153m of its £500m programme budget on core PSB content.

Criticising Channel 4's attempts to diversify into areas such as digital radio, Elstein attacked its reported £100m+ bid for Virgin Media TV earlier this year, which, he said, "would have left the one PSB channel surrounded by 22 non-PSB channels".

He also hit out against the plan to merge its ad sales operations with Sky Media: "It was sad to see Channel 4 suckered into yet another Sky diversionary tactic, designed to head off a possible sales deal between Channel 4 and Five."

He concluded: "Surely by now it is apparent that Channel 4 needs not just a new chairman and a new chief executive, but a new board, new governance, a new remit and a new start."

Elstein argued that if "Channel 4 sold off its non-PSB channels and concentrated on its core purpose it could dramatically reduce staff and costs. If it entered into a joint venture with Five, it could save tens of millions of pounds a year in addition.

"There is no reason why Channel 4 should not continue to play its core role for many, many years, if it just abandoned its delusions of grandeur, for which all board members of the last decade carry some responsibility."

He also criticised the scope of the BBC's online operations. He noted that, five years ago, bbc.co.uk "cost less than £70m a year", but claimed the average spend over the past two years totalled £180m.

However, Elstein, who launched Five and worked for BSkyB as head of programming, reserved some of his most strident comments for the future of the BBC.

He renewed his call for the BBC to be funded by a voluntary subscription. He said digital switchover offered "the first opportunity for actually implementing a subscription mechanism for funding the BBC". 

Elstein conceded that subscription funding "would raise many issues for the BBC", but added: "Would news, the Proms, children's programming, and their like still be provided in the absence of a compulsory licence fee? In my view, absolutely: they would be key attractions for potential subscribers."

This article was first published on mediaweek.co.uk