Down-Channel economics 

28 June 2018

From the Daily Telegraph for Monday 5 October 1970

CHANNEL Television was one of the last I T V companies to be set up by the Independent Television Authority to provide a regional service. From the outset it was recognised that with a potential audience of only 130,000 on the Channel Islands the financial viability of the station would be critical.

Lack of capital soon resulted in a crippling overdraft from which the company is only now recovering. The ban on cigarette advertising cut deeply into its income and the levy on advertising revenue had repercussions through higher network fees charged by the other companies.

Without a heavy subsidy from the Authority, Channel Television could never have survived. A realistic rent for the I T A transmitter which services the islands is about £60,000 a year, but it charges the company a peppercorn annual rent of £100.



Only service

The Authority’s financial sacrifice is made to enable the company to provide the only regional service in the area. There is no BBC studio in the islands, and local events receive only lip-service from the Corporation’s staff in Plymouth, who include the occasional item in its contributions to Nationwide.

Channel revenue now runs at about £160,000 a year, of which £60,000 comes from local advertisers, with the company providing facilities for them to make their own commercials. Running costs are at about the same level, so there is no surplus, and shareholders are still waiting to receive their first dividend.

Mr Ken Killip, the company’s managing director, is optimistic that a dividend will be declared in the next year or two. He is firmly convinced that the station’s financial troubles stemmed from under-capitalisation at the start, which placed an overwhelming burden on the company during its formative years.


The Television Centre


Local loyalty

But Mr Killip also recognises that the company will never be able to provide more than the equivalent of a small shopkeeper’s income from its profits, if and when they materialise. The surprise is that its shareholders had sufficient faith in Channel to back its application for renewal of contract in 1968.

Strong local loyalty among the islanders probably accounts for this decision. Of the 370 shareholders only 29 are not domiciled in the Channel Islands and most of these bought shares before moving to the mainland.

At present the company’s programme output is limited to two-and-a-half hours a week, mostly comprising local news bulletins and magazines. In the past they have made programmes with an eye to selling them to the network.

The most recent of these was “The Bitter Years,” a programme made to mark the 25th anniversary of the end of Nazi occupation. Although of interest outside the islands only one of the big five companies, Thames, accepted it even though most of the smaller companies took it.

With the shareholders seemingly content to provide a public service station the financial future of the company rests with the I T A. If when contracts are renewed in 1976 the Authority insists on Channel paying its way and demands the full transmitter rental then it is difficult to see how it can survive.

As Mr Killip pointed out the shareholders are happy to mark time but they would not be prepared to incur further losses. Any increase in revenue is likely to be swallowed up by mounting production costs so there is little indication that the company will ever be able to continue without the Authority’s help.

The Authority’s decision will rest on its attitude towards continuing a truly regional TV service in an area not sufficiently large to support it. It will have to decide whether it is prepared to subsidise what amounts to a minority service in order to maintain its original conception of providing regional television for every part of the British Isles.



Good record

Channel’s programme record is good. Its local productions get a bigger share of the audience than any other programme. Its news bulletins attract nearly a 90 per cent. share of the audience and its magazine output well over 80 per cent.

It cannot be done on the cheap. The B B C’s efforts to cover the islands from Plymouth have proved what an impossible task it is.

Should the I T A take a tough line — and there is no reason why it should continue to subsidise one company while charging realistic rents from others — it will be for the islands’ community to seek a solution.

One solution would be a grant from the islands’ Governments raised by a levy on the rates but there is little evidence to show that this would meet with public support.

The islanders are so accustomed to low rates and taxes that anything that endangers this prerogative is almost regarded as sacrilege. When I was in Jersey the islands’ Government was considering increasing taxes to meet a recent pay rise for Government employees. Most people I spoke to were appalled at the idea. If these same people are eventually asked to help meet the cost of their own television service their true loyalty to Channel Television will be put to the test.



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