What's wrong with our TV?

Channel 4's chief on the failure of nerve that has left us trailing the Americans.

Greg Dyke is a very nice man. So nice in fact that earlier this year, before I left the BBC to take over at Channel 4, he paid me to sit at home just to watch television for a few months. All I can say is I wish someone had warned me. It's not that I felt today's TV was bad exactly. In many ways, production quality and professionalism are higher than they've ever been. The problem is that so much of it just feels dull, mechanical and samey.

There's a pervasive sense of predictability. When you're looking for ambitious, complex and above all modern TV, you find yourself watching not British, but American pieces: Six Feet Under, say, or 24. There are exceptions but the idea that British television is teeming with that kind of creative risk is a joke.

A creative deficit has opened up in British TV and it affects every channel, including Channel 4. I don't think it's all the fault of competition. I lay most of the blame on two kinds of conservatism: the modern, technocratic risk-aversion of the schedule; and, lurking in the shadows, an older cultural conformism. We have to overcome them both.

There was a time, in the early days of Channel 4, when the word risk meant something. Nothing was routine: everything was an experiment. But by the end of the 90s, the Channel 4 Television Corporation was in danger of taking Channel 4 itself for granted. The corporation began to become distracted by its ambitious digital plans and to allow its creative decision-making to become too centralised and risk-averse. E4 would be the test-bed for new programmes and new talent, Channel 4 the exploiter of known success, the cash cow.

The model felt intuitively right: digital new, analogue old, digital innovative, analogue conservative. It was part of my thinking at the BBC about the proposed BBC3 and the role it could take over from BBC2 and BBC1. Perhaps it's easy to say in hindsight, but it's clear today that much of the thinking that underpinned this strategy was wrong.

First, it's nonsense that innovation within individual programmes doesn't count any more. This is the age of the blockbuster, when a single breakthrough hit can transform the performance of even the largest network. Second, the hold that established channels and media brands have on consumers is impossible to reproduce quickly with new digital services. It's desperately difficult for digital channels to launch new shows or new talent on their own. Most just disappear down a deep, dark, digital hole.

We shouldn't overreact. The future will be broadly based across platforms and media. But the centre of creativity and originality will not be E4 or any other of the new businesses, it will be Channel 4 itself.

Many people in our industry accept that we face a creative problem. But we're all a bit prone to the ITV defence: it must be someone else's fault. It's the BBC. It's Sky. It's the government. The most popular culprit is competition, but I'm not so sure. Competition can have positive effects: far from destroying creativity it can encourage it. The arrival of Channel 4 forced BBC2 to get its creative act together, just as the growth of Channel 5 is challenging the rest of us now.

Consider America, where competition and fragmentation are even more intense. When MTV risked being swamped by imitators, they didn't wring their hands or fret about the "soul of television". We shouldn't just moan about competition. We should engage with it, get inspired by it. Anyone who thinks that we can react to competition simply by playing safe should think again. Audiences are showing signs of getting bored with safe television.

If you're looking for a root cause of the current creative deficit, I'd point rather to the deep wells of conservatism in our television culture. When you add this broader conservatism to the more recent risk-aversion that has resulted from centralised decision-making and a move from instinct towards analysis, you have a cocktail that is nearly lethal for creativity. British television used to be famous for its risk-taking. Now, we're trailing behind American TV, and our own viewers.

From now on we must put creativity first. We are trying to approach the Channel 4 schedule not as a legacy of the past two decades, but as if we were launching an entirely new channel. We need to look hard at the current line-up of programmes - the public don't want tired programmes from Britain's most innovative broadcaster. We must be braver in the way we schedule. We should be less frightened of cock-ups and failure. None of this will be possible if we don't have a climate in broadcasting which will support creativity and risk-taking in the long-term. That climate is under threat.

Earlier this year the government published a draft communications bill. It's a realistic picture of how our industry might develop over the next decade and it offers an ambitious vision for public service broadcasting. Unfortunately that ambition is not underpinned by any specific measures to strengthen Channel 4's position: the bill wills the ends without enacting the means. There is nothing in this bill to secure an independent Channel 4, and very little to support and strengthen an independent production sector.

The government believes you can change great swaths of the commercial production and broadcast sectors without having an impact on that part of public service broadcasting which is also funded commercially. I think they're wrong.

Sooner or later some of the consolidation that the bill allows - for instance between the ITV companies or perhaps between Channel 5 and Sky - will take place. The secretaries of state say they hope the result will be new investment, new creative opportunities and new jobs. But this isn't the car industry. Consolidation in the television industry has tended to focus on cost-cutting and the competitive advantages of pooling ad sales, and it's always led to job losses. Nor is it likely that inward investment will lead to lots of wonderful new programme factories.

So far the original Channel 4 financial model has stood up remarkably well, but we are heading into uncharted waters. The danger is not that the channel will go bust - we can and will return to profitability - but rather that our ability to take creative chances will be curtailed. Some people might argue that the solution would be for Channel 4 to move entirely into the private sector. But, unless the public model for Channel 4 fails utterly, I don't believe that privatisation is the right answer.

An independent and publicly owned Channel 4 remains by far the best option. We intend to secure it by making the channel as competitive as possible. However, the changes in the market which the communications bill foresees, combined with the impact of digital conversion, could reduce the channel's income to a point where its ability to deliver its unique brand of public service is compromised.

We don't expect to call on public support over the next few years. Indeed, we may never do so - Channel 4 should always aim to pay its own way. But if changes in the broadcasting landscape mean we have to choose between financial survival and our public service remit, then the case for public support will be overwhelming. I'm confident we can win that argument because I'm confident we can deliver on the promise of creativity.

· Mark Thompson is chief executive of Channel 4. This is an edited version of the James MacTaggart Memorial Lecture, delivered last night at the Guardian Edinburgh International Television Festival.The full text is available on MediaGuardian.co.uk