BBC and Channel 4 in talks about commercial link

by Daniel Farey-Jones, Brand Republic 08-Sep-08, 09:00

LONDON - The BBC and Channel 4 are in early stage talks about a commercial alliance through BBC Worldwide, reports claim.

According to The Observer, the talks have been "sanctioned at the highest levels of the BBC" and in the words of BBC sources are "proceeding well".

The form of the partnership is yet to take definite shape, but possibilities include the BBC selling Channel 4's programmes abroad and taking a commission, and the BBC making international versions of Channel 4's hit shows using its own production facilities, with the pair sharing profits.

A BBC spokeswoman said: "BBC Worldwide is regularly talking to major players across the industry. However, we have nothing to announce."

The move is likely to be aimed at resolving the increasing funding shortfall Channel 4 faces as digital switchover approaches. The mainly advertising-funded broadcaster claims it is likely to need between £100m and £150m per year by switchover's completion in 2012.

Channel 4's need for a new source of funding to replace its free analogue spectrum has given rise to a number of proposals which would affect the broadcasting ecosystem in varying ways.

According to the report, advisors at the Department for Culture, Media and Sport came up with a proposal earlier this year to give Channel 4 a stake in BBC Worldwide.

The most widely known proposal is for the BBC's £3.2bn annual licence fee income to be "top-sliced" and allocated to other public service broadcasters including Channel 4. The plan has been opposed by BBC chairman Sir Michael Lyons.

BBC Worldwide has recently been underfire for its acquisition of Lonely Planet, which some believe steps outside of its remit.