Deloitte: Privatization of TV channels costs society billions

29 June 2011

According to a study done by Deloitte the privatization of television channels does not create efficiency, but actually leads to enormous additional costs to the economy. The consultancy firm examined several case studies, including CBC in Canada and the BBC in the United Kingdom.

The remarkable outcome of the study is particularly interesting in view of the current plans of the Dutch government to restructure its broadcasters. The reform of the Dutch broadcasters is supervised by consulting firm Boston Consulting Group (BCG), who are paid € 1.1 million for the research.

TV channels

The economic value of broadcasting channels

Deloitte has developed an analytical method to measure the value of television channels for an economy. The changes in value by for example privatization can also be measured. It is both direct and indirect impact that can be measured. In the case of CBC in Canada Deloitte calculated that the total economic impact on the Canadian economy is about $ 3.7 billion. A privatized CBC would cost Canada's economy about $ 1.3 billion. In other words: CBC's net value is $ 1.3 billion.

Negative effects of privatization

Privatizing CBC would lead to a decline in spending on Canadian content, and a lot more spending on foreign programming. Moreover, privatization would have a negative impact on production, local economies and innovation in new technologies.


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