Funding in Creative Media Sector

During the station formative years, the founding came from ITV companies in return of the right to sell adverts of its region in the fourth channel.
Now is still paid in the same way as majority of private companies, such as, by selling of publicity, program sponsorship and by the selling of any program article and rights of merchandising which includes, overseas sales, video sales and outside.




The Funding
The funding change occurred under the Broadcasting Act of 1990, when the new corporation had the ability to finance itself. Initially, this arrangement left a guaranteed minimum income from the "safety net" if the revenue was very low, financed by large insurance payments made to ITV companies. However, this subsidy was never required, and these awards were eliminated by the government in 1998. After ITV cut off, the cross promotion that existed between ITV and Channel 4 also ended.


Money Spent
Channel 4 has raised concerns over how it might finance its public service obligations after digital switch-over. However, some certainty came with the announcement in April 2006 that Channel 4's digital switch-over costs would be paid for by licence fee revenues.


On 28 March 2007, Channel 4 announced plans to launch a music channel "4Music" as a joint venture with British media company EMAP which would include carriage on the Freeview platform. On 15 August 2008, 4music was launched across the UK. Channel 4 has announced interest in launching a high-definition version of Film4 on Freeview, to coincide with the launch of Channel 4 HD, however the fourth HD slot was given to Channel 5 instead. Channel 4 has since acquired a 50% stake in EMAP's TV business for a reported £28 million.




Main Source of Income
Channel 4 is a publisher-broadcaster, meaning that it commissions or buys all of its programming from companies independent of itself, and was the first broadcaster in the United Kingdom to do so on any significant scale; such commissioning is a stipulation which is included in its licence to broadcast. This had the consequence of starting an industry of production companies that did not have to rely on owning an ITV licence to see their programmes air, though since Channel 4, external commissioning has become regular practice on the numerous stations that have launched since, as well as on the BBC and in ITV (where a quota of 25% minimum of total output has been imposed since the 1990 Broadcasting Act came into force). Although it was the first British broadcaster to commission all of its programmes from third parties, Channel 4 was the last terrestrial broadcaster to outsource its transmission and play out operations (to Red Bee Media), after 25 years in-house.

The requirement to obtain all content externally is stipulated in its licence. Additionally, Channel 4 also began a trend of owning the copyright and distribution rights of the programmes it aired, in a manner that is similar to the major Hollywood studios' ownership of television programmes that they did not directly produce. Thus, although Channel 4 does not produce programmes, many are seen as belonging to it.
It was established with a specific intention of providing programming to groups of minority interests, not catered for by its competitors, which at the time were only the BBC and ITV.

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