TV bosses pleased with merger plan

TV chiefs welcomed an Ofcom report that recommended Channel 4 should become part of a larger organisation through a merger or partnerships.

The channel could merge with Five or BBC Worldwide to create a strong provider of public service broadcasting (PSB) outside the BBC, the study said.

The media regulator's long-awaited review of the future of PSB rejected the idea of "top-slicing" BBC programme funding, using some of it to support services on channels outside the BBC.

But it said that unspent money from the licence fee set aside to help the digital switchover could be used to bridge the PSB funding gap.

This could include a "one-off allocation of funding" to help Channel 4 with any proposed merger, Ofcom said.

In Putting Viewers First, Ofcom said the key was not to prop up Channel 4 for its own sake but to ensure there was a viable institution apart from the BBC that would provide public service content that the market would not.

Structural changes to Channel 4 would need to be economically sustainable, competitive, provide a genuine alternative to the BBC and complement the market, Ofcom said.

The alternative would be to give Channel 4 public funding directly, relieve it of its pubic service remit and make it a fully commercial network, or mothball it.

Andy Duncan, Channel 4's chief executive, said he was "extremely pleased" with the report.

"They (audiences) want the BBC but they don't only want the BBC, and quite clearly Channel 4, in some form, needs to be at the heart or the centre of providing that plurality," he told the Today programme. And that we are delighted about."