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David Abraham
David Abraham said public service broadcasters including Channel 4 and the BBC were the only bulwark against a broadcasting industry dominated by US media moguls. Photograph: Murdo Macleod
David Abraham said public service broadcasters including Channel 4 and the BBC were the only bulwark against a broadcasting industry dominated by US media moguls. Photograph: Murdo Macleod

British TV industry at risk from US tech and media giants, says Channel 4 chief

This article is more than 9 years old
David Abraham says creativity will be sacrificed for profit as US companies buy up British broadcasters and producers

Full text of David Abraham's speech

The chief executive of Channel 4 has warned that large parts of the British television industry are being bought up almost wholesale by US media companies, while the medium faces a longer term existential threat from the increasing involvement of technology giants including Apple and Google.

David Abraham said public service broadcasters (PSBs) including Channel 4 and the BBC were the only bulwark against a broadcasting industry dominated by US media moguls such as Rupert Murdoch and Virgin Media owner John Malone and even larger technology firms.

"TV is clearly now a combat vehicle for tech and mobile companies and platforms to compete with each other rather than a sovereign industry in its own right," said Abraham, delivering the prestigious James MacTaggart memorial lecture at the Guardian Edinburgh international television festival on Thursday evening.

"An Apple-Disney merger would substantially dwarf Fox-Warner-Sky. But what duties or obligations will these new global gated communities have towards our industry whose future they increasingly influence?" he asked.

Abraham urged politicians and regulators to act decisively to "update and strengthen" the UK's PSB system, a great British invention that had "created the best conditions for creative programme-making on the planet".

This creativity risked being sacrificed for profit, he said, in the rapid industry consolidation in recent months, with US companies buying UK broadcasters and producers. This has included the UK's largest producer, Midsomer Murders maker All3Media, being bought by Discovery and Malone's Liberty Global – which also snapped up BSkyB's 6.4% stake in ITV – and Channel 5 being swallowed up by MTV owner Viacom.

"This special landscape of ours did not happen by accident," Abraham said. "So we should not assume that, left purely to the market, it will continue to thrive. If you care about creativity, speak up and speak up now. Stay silent and our special system may wither. Once gone, it will never come back."

This year could potentially go down as the "peak year of the gold rush of British television", he said, adding the sobering observation that the US media companies doing the buying were themselves dwarfed in size by technology giants such as Apple.

Abraham said his point was "not to wrap ourselves in a union jack – or a saltire, for that matter". But he said corporate America had a "different attitude towards experimentation and risk-taking" to that in the UK, and compared the evolving TV landscape to the controversy around US drugs giant Pfizer's aborted takeover attempt for British rival AstraZeneca. "In Britain we value some things beyond money alone," he said.

He called for the PSB system to be shored up so that its "creative risk capital" investment in UK-originated programming could be protected. The main PSBs, including the BBC, ITV and Channel 4, were responsible for 80% of the £1.7bn spent on original programmes from UK producers last year, he added.

Abraham, a former advertising executive, took a swipe at Hollywood star Kevin Spacey, Google's Eric Schmidt, and two Murdochs – Rupert's daughter, Elisabeth, and son James – who have delivered four of the past five MacTaggart lectures.

"In recent years we've seen a parade of Americans standing up here ... telling us how things ought to be done," he told the audience of TV executives and programme-makers.

"But, how do you explain the number of US entities queuing up to buy our producers and now, our broadcasters? Doesn't this suggest that, maybe, as with our gun laws and health system, it's us who are showing them how it ought to be done?"

With media regulator Ofcom examining the future of public service broadcasting in the UK, and the BBC on the eve of negotiations about its own charter and licence fee renewal by the end of 2016, Abraham said there was a "critical opportunity to update the public service broadcasting settlement for a new era, to strengthen it, and help the whole UK creative economy continue to grow".

He added: "Recent government measures have focused on tax breaks to support inward investment for production in the UK.

"Bringing American movie and drama productions here is great for jobs in the same way as making iPhones in China is great for China – but the IP and profits are on the first boat out of here."

Abraham outlined a range of proposals that would help Channel 4, including a reform of the terms of trade that govern broadcasters' commercial relationships with independent producers, and said subscription TV operators including BSkyB should have to pay to be able to offer the most popular PSB channels such as the BBC and Channel 4 to their customers.

"The UK is now one of very few major markets in the world where public service broadcasters receive no payment for the immense value their channels bring to pay platforms," said Abraham. "Now is the time to correct this and we need new rules to do it."

A BSkyB spokesman criticised Channel 4 for "again calling for a subsidy to compensate for its declining performance". He added: "This proposal amounts to a discriminatory tax on millions of licence fee-paying viewers to watch public service content that is supposed to be free."

Abraham said the UK independent production sector was being "snapped up almost wholesale" by global media companies "at a faster rate than tickets to a public flogging of Jeremy Clarkson".

This includes Rupert Murdoch's attempt to create one of the world's largest TV production businesses in a joint venture combining Fox's Shine Group, which makes shows including MasterChef, Big Brother producer Endemol and Core Media, maker of American Idol.

"It may be on hold for now, but if Fox, Time Warner and Shine Endemol all merge, how long before that would subsume Sky Europe (presumably all taking nuanced direction from a Murdoch in New York)," Abraham said. "Such an entity would have combined revenues three and a half times the size of the entire UK television industry."

Describing Murdoch's long-time rival Malone as a "bogeyman" who "hates to pay tax", Abraham said the UK production sector "risks becoming a victim of its own success".

"Scale demands an increased focus on cost-cutting and margins," he said. "Reformatting ideas is more efficient than the messy business of finding new ones. Fear of risk overtakes an appetite for it."

Abraham backed Channel 4's not-for-profit business model and said if the broadcaster had to pay shareholders it would take fewer creative risks and become "another Channel 5. Who would Channel 5 copy then?"

He said politicians and regulators had to "act and act decisively" as the "great inventions of John Logie Baird and Tim Berners Lee converge" in the digital age.

More on this story

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