IS CHANNEL 4 SHOWING ITS AGE? Channel 4 is 20 years old this week

Ian Darby discovers if it still has the point of difference in its remit, or if market forces are making it play safe.

Channel 4 launched on 1 November 1982. After a preview of its programming, the fun started in earnest at 4.45 pm with its first ever show, the words and numbers quiz Countdown. Vauxhall appeared in the ad break as its first advertiser.

Like Richard Whiteley's terrible ties, the broadcaster has reached its 20th anniversary - but serious questions are being raised about its future as the current chief executive, Mark Thompson, takes it into a period of cost-cutting and programming changes.

The legacy of Channel 4's first 20 years is one of diversity and innovation.

It was launched, uniquely in broadcasting, as a hybrid of the public sector and commercial world (it combined a clear public service remit to educate and inform - to "appeal to tastes and interests not generally catered for by ITV" - but was backed by funding from advertisers).

But critics suggest that in milking phenomena such as Big Brother it is in danger of losing its point of difference.

At the risk of over-simplifying matters, Channel 4's history can be broken down into four distinct eras. Under its first chief executive, Sir Jeremy Isaacs (1982 to 1988), it built its creative reputation and a schedule of genuine diversity (Brookside appearing on a schedule alongside esoteric discussion shows and a series of independently produced Film on Four slots including Neil Jordan's highly acclaimed Angel). Michael Grade (1988 to 1997) took Channel 4 into a more nakedly commercial era (it began selling its own advertising in 1993) while steering it through a period of rationalisation.

Michael Jackson (1997 to 2001) presided over the diversification of Channel 4 into new areas (4Ventures) but its rapid expansion was perhaps at the cost of the core Channel 4 terrestrial channel, an issue that Thompson must now address.

Channel 4 has taken a hammering over recent months. Its golden reputation has been tarnished as Thompson reacted to its biggest annual loss in 2001 (£28 million) by announcing 200 job cuts. The problems were clear even before Thompson moved to Channel 4 from the cosy environs of the BBC when late last year it cut back its investment in the loss- making commercial arm 4Ventures.

Meanwhile, Five has inherited some of the Channel 4 lustre and is increasing audience share and ad revenue. But while for a couple of weeks in October Five overtook Channel 4's peaktime audience share and can now match it in daytime, Channel 4's figures aren't the horror story you'd expect. Revenue projections suggest that its share of TV advertising revenue will be up 4.2 per cent for 2002 to £629.6 million (20.2 per cent share). Its total share of audience for the year to date is 10.1 per cent, the same as 2001. Its share of 16- to 34-year-old viewing is down slightly, currently at 12.2 per cent compared with 12.3 per cent last year. However, this seems like a solid position (advertising revenues are up £25 million on 2001) rather than a commercial crisis.

Andy Barnes, Channel 4's sales director and former commercial director, joined the broadcaster early in 1992 from TVS's sales operation to build Channel 4's sales team ahead of its first day of selling airtime in January 1993. Before this, ITV had sold Channel 4 airtime in exchange for funding the channel. The funding formula between Channel 4 and ITV remained in place until 1996 when the Broadcasting Act changed the rules relating to payment of any surplus profit. Barnes remains bullish about its fortunes: "The future is fantastic. We're in a unique position not hidebound by public service broadcasting ethics and are in a position to move quickly and effectively. We continue to deliver bite-sized chunks of the most sought-after audiences."

Simon Marquis, the chief executive of Zenith Optimedia, is hopeful for Channel 4's future. "Our sense is that it's been a period of reappraisal and reassessment. It's been a year of some difficulty because of E4 and FilmFour and having to lose people, but Channel 4 now has this under its belt and can return with a stronger vision," he says.

But does a strong Five pose a serious threat to Channel 4's airtime sales?

Barnes says: "Five has succeeded in delivering even older audiences than ITV. Five will do okay. It has a mainstream offering that predominantly older women watch."

Five's director of programmes and a former Channel 4 programmer, Kevin Lygo, has refuted this, pointing to commissions such as Crime Scene Investigation and The Shield to suggest that Five is stealing the clothes, and audience, of Channel 4. He was reported as saying about Thompson: "If he thinks his channel's original, he's got problems."

Thompson's efforts to reinvigorate Channel 4 after the job cuts involve increasing the programming budget to £430 million, its highest ever. But he is also committed to cutting costs by 30 per cent on 2000 figures. "I want to put as much money as I can on the screen. Our programming budget will be 7.5 per cent up next year and I hope we can do better than that if ad revenues allow us to invest more. The spread of the channel got a little too big, there were too many layers and confusing stratas. This is a move towards simplifying, pulling things together and focusing," Thompson says.

So does this mean the 4Ventures properties such as E4 will wither on the vine? Not so, Thompson says: "E4 is a great success. 4Ventures was a great idea but the corporation took its eye off the main channel. The priority is to invest in Channel 4 itself and its creative renewal."

Observers have interpreted such statements as an attack on the reign of the previous chief executive, Jackson, but Jackson isn't taking it personally: "Any chief executive would have done many of the same things (as Thompson) and I'm sure I would have done. Every media company in the world has to adapt to the shortfall in advertising revenue."

And Thompson argues that 4Ventures is still important in Channel 4's strategy: "I think part of its (C4's) cache to advertisers is the relationship it has developed with a certain kind of audience. Its brand values resonate with young and upmarket audiences. You can't keep these audiences if you restrict yourself to one terrestrial channel."

Thompson points to E4 doubling its share of 16- to 34-year-old digital viewers in the past year as a sign of it moving in the right direction and claims the channel is on track to be profitable by 2004 or 2005.

In the short term, Thompson and the programming chief, Tim Gardam, are focusing on the shape of the new schedule with Brookside moved out of peak to provide more flexibility and ability to invest in other drama and comedy. Critics carp that its huge investment in The Simpsons was a bid too far (Thompson has said it represents good value at around £100,000 an episode) and that it will still rely on the Big Brother phenomenon next year. But Thompson is also committed to more regional programming: "In 2003 there'll be lots of bold new stuff and by 2004 the schedule will be dynamic."

Thompson says Channel 4 will provide more diverse drama. "Over the years, Channel 4 has shown some fantastic dramas such as GBH and The Politician's Wife but recently our own original drama has become more like acquired drama with Teachers and Queer as Folk. This is the model of where our drama is going - contemporary, edgy, youth-skewed."

The promise is also to deliver more comedy and more "edgy entertainment".

Thompson points to Green Wing, a new comedy from the Smack the Pony creators, as one he is excited about.

This new schedule is welcome, Marquis says: "It's very clear that what we want from Channel 4 is consistent, young, upmarket audiences. We approve of the desire to be edgy and innovative as long as it is not at the expense of the other special audiences Channel 4 can attract."

But what qualities does Thompson feel that Channel 4 has possessed over the 20 years? "The courage to do new things and make trouble. It had big, lively, noisy shows, from The Tube to TFI Friday to Big Brother in an age when a lot of programming was vacuum-packed."

So is it in the mire, its best days behind it? "I think C4 needs to change but a lot of the recent stuff written about C4 has been overdone," Thompson says.

After his August MacTaggart Lecture, Thompson received some flak for raising the issue of Government funding if the advertising downturn continues over the coming years. He received little sympathy from his commercial rivals but is now at pains to make it clear that he does not expect this scenario to occur.

"The Government could help us by not exacting a spectrum charge. We're not looking for government handouts, this is certainly not something that will happen in the foreseeable future. I'm confident that next year and beyond we can keep going and be quite profitable," he says.

Thompson is right to focus on the programming. Isaacs for one is worried: "The channel must try under Mark Thompson to improve and keep its cutting edge by continuing to innovate. It must sustain Channel 4 News at its one-hour length, continue to produce watchable drama and strong, courageous documentaries and, however successful Big Brother may be, it must not solely become known for rudery after 10pm on a Friday night."

After all, Channel 5 can certainly give it a run for its money in that department.


SIR JEREMY ISAACS, Channel 4 chief executive 1982-88

"We were encouraged by an Act of Parliament to pursue innovation and experiment and we just gave the nod to things that wouldn't have previously got on British television. But I always knew that when Channel 4 became wholly dependent on ad revenue it sold itself then it would be forced to play it safer. But Michael Grade did a marvellous job in consolidating and making it more profitable while fighting the battle to defend its income and independence."

MICHAEL GRADE, Channel 4 chief executive 1988-97

"Channel 4 has two outstanding achievements. One is to have been the force for change in programme- making and a major sponsor of the independent production sector. The second is it is a phenomenal achievement, unique in broadcasting around the world, in being a full public service broadcaster funded by advertising."

MICHAEL JACKSON, Channel 4 chief executive 1997-01

"Channel 4's main achievement has been to put a bomb under the consensus of British television and as a result of Channel 4 the breadth and depth of opinion, of diversity and of humour has changed, not just on Channel 4 but everywhere. It has been a seedbed for the whole of the television industry. During my time we did two things: managed to square the circle of being very strong creatively in a very competitive marketplace and secondly prepared Channel 4 for the digital era."

ANDY BARNES, Channel 4 sales director 1992-today

"When I arrived at Channel 4 there was no sales department, no desks, no lights. We had a year to prepare for selling our own airtime. Channel 4 felt, quite rightly, that it was being undersold and could make more money in the open marketplace.

ITV only sold it to a level of 14 per cent of its own channel. The worst percentage we've since got was 18.5 per cent share in 1993. It is currently 20.4 per cent and this in an environment with many more competitors."

MARK THOMPSON, Channel 4 chief executive 2001- today

"I believe that the purpose of Channel 4 is exactly as it was set out by the Independent Broadcasting Authority all those years ago: to be the creative space in the centre of British television where new ideas, new genres, new kinds of programmes can be invented; to be the place where new talent and new opinions can find their voice; to be on the side of the iconoclasts, the awkward squad, the rule-breakers. The need for a Channel 4 like that is far, far greater than it was 20 years ago."

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