MEDIA FORUM: Is Channel 5 close to becoming a real rival to ITV?

Will there be substance to Channel 5's revamp and is the much-maligned broadcaster about to make its schedule better, Alasdair Reid asks?

It rather irks the senior management at Channel 5 that there's such a time lag between reality and perception where their baby is concerned.

And who can blame them? Well, one or two people, actually - the sorts of pursed-lipped critics liable to quote all sorts of stuff about karma and making your own bed and lying in it.

But enough already. The channel has surely paid its dues and it has put the really dumb years behind it. There's a bit of a buzz about Channel 5 these days, largely due to the fact that Dawn Airey, who became the chief executive more than a year ago, has been successful in recruiting some pretty sharp minds to the cause.

For instance, the programming chief, Kevin Lygo, has been raising aspirations on the back of some art and history programming, for goodness sake, and the marketing director, David Pullan, was previously one of the marketing masterminds at the UK outpost of MTV. When Pullan arrived, the word was that he was being brought in to reinvent the whole look and feel of the station, thus completing its evolution and burying memories of its tawdry early years.

The word was not wrong. The rebranding campaign, with a little help from TBWA/London, will begin on 16 September and there will be a whole new on-screen image. For instance, the distinctive colour bar is to be dropped, the onscreen graphics and station ident material will be more up MTV's sassy street and the channel will be rechristened as plain "Five".

It comes at a time when its majority shareholder, RTL, has declared it will not be bidding to buy either Carlton or Granada and will be focusing all its UK efforts on Channel 5. When people sneer at Channel 5's pretensions these days, Nick Milligan, Channel 5's deputy chief executive, tends to remind them that he works for the biggest and most successful broadcaster in Europe, bar none.

"RTL has shareholdings in 23 TV companies and 14 radio stations across Europe, he points out. "It has the only true broadcast network across Europe and no-one rivals it or is likely to in these market conditions.

Our next strategic move will be to structure pan-European advertising deals across the RTL network. RTL is an advertiser-funded, free-to-air business that ignored the distraction of pay-TV and kept all of its advertisers' revenue on screen."

But does that necessarily translate into success in the UK market? Should we be confident there's substance behind the Channel 5 revamp? Just watch this space, Milligan says: "The business is in great shape and has had the most fantastic year. We now have the best creative talent since launch.

Marketing and programming now truly work as one and our clients have rewarded our audience growth with a 23 per cent increase in revenues. The scene is set, the hard work has been done and the future of our company is completely in the hands of our shareholders. If they continue to invest behind the programme budget, Five will become, in time, a true competitor to ITV."

There are some clouds, though. The big question mark concerns Airey, who ITV wants to fill its vacant programming hotseat. There are those who think it's a foregone conclusion - largely because they can't imagine a world in which ITV isn't the UK's top commercial network. Others believe she would be mad to take the job - ITV's future is by no means clear and a fudged Communications Bill could leave Carlton and Granada no nearer a merger.

With Channel 4 facing tricky times, the job with the most potential in commercial television is arguably at Channel 5. Especially now that RTL has declared its intentions.

Michael Winkler, Gillette's European media director, says that this is a hugely important factor and that we shouldn't underestimate RTL's strengths, especially in programming terms. "Now that RTL has abandoned thoughts of taking over Carlton or Granada I believe it will focus on Channel 5. I think it will increase its commitment and investment."

Winkler points out that RTL is at the height of its game in its core German market and if it can bring just a fraction of that expertise to the UK, then Channel 5 can face the future with bags of confidence. "I went to the Cologne TV fair recently where they had programme screenings showing what's coming up for next year. Of all the broadcasters there, RTL stood out. Its programming and scheduling ideas hit all the right marks and it has a very clear idea about what it should be doing."

Jerry Hill, the chief executive of Initiative Media, certainly believes the rebranded Five can build on firm foundations. He states: "Channel 5's achievement this year has been to increase all adult viewing while simultaneously shifting its profile away from ITV and towards Channel 4."

Channel 5's total audience share is now up to about 7.5 per cent - small in comparison with BBC1 or ITV but the highest it has ever achieved. Many believe that it is poised for a step change in audience delivery, although Hill points out that there are still ghettos in the schedule. "Its biggest shows are imported from the US and it has virtually no live or interactive output. If ITV does do as it threatens in regaining focus and pulling its socks up, then the test for Five will be to continue to sustain its recent successes, he adds.

On the other hand, could Channel 5 be about to become really cool? Can it, in short, become the new Channel 4? Nick Manning, the chief executive of Manning Gottlieb OMD, thinks it's almost there. "I have nothing but good things to say about Channel 5, he reveals. "Aside from the BBC, life is not at all rosy for the other terrestrial broadcasters. Where Channel 4 is concerned, reality TV seems to have it by the nuts and won't let go; as for ITV, post-ITV Digital it's not in good shape at all as a broadcaster. Channel 5 has been able to slip between on a small budget and has built a good audience share almost unnoticed."

Manning is particularly impressed by its lean structure. "It's a shallow organisation - and I'm not talking about intellectually. I think it will be able to use increased budgets to build its audience effectively. I like the notion that Chris Evans might get involved in a bigger way too. Evans is producing a show, hosted by the Radio One DJ Chris Moyles, in the autumn season - but there is speculation, fuelled by Evans himself at Edinburgh, that he might also take a stake in the channel. Manning sums up: "It's what would have happened at Channel 4 not so long ago but which doesn't happen now. They will give him a place to show off his talent. They will always have to be careful but I'm confident that Channel 5 can keep coming up with clever programming ideas at low cost."

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