Odd couple finds C4 success

Biz scoffed at newbie toppers

LONDON — They’re youthful, informal, unassuming — and both relative newcomers to the media business. No one like them has ever run a British TV station before.

Yet Luke Johnson and Andy Duncan, respectively chairman and CEO of Channel 4, are giving the web the vision it needs to navigate the challenges of the digital age.

This is in spite of both men’s total lack of production experience.

Johnson is a successful restaurateur and financial journalist, while Duncan spent most of his career in marketing for Unilever before a three-year stint as the BBC’s head of marketing, where he helped launch digital terrestrial platform Freeview.

Their fresh mindset is reshaping state-owned C4, a pubcaster/commercial hybrid that exists on advertising rather than government coin.

C4 has often warned that it will be unable to compete against giant pubcaster BBC, commercial terrestrial rival ITV or dominant satcaster BSkyB in the digital age without sacrificing its remit to make innovative shows.

However, the odd couple seem to be grasping that particular nettle.

Already Duncan has put more coin into drama, youth-skewed digital web E4 (which he has made free-to-air) and new media (including a mobile portal and a music download site). There are extra funds for another new digital channel, More4, aimed at older auds, which bows this fall.

An online documentary service, 4Docs, launching this week, is one example of C4’s renewed enthusiasm for public service.

“We should have done all that before now, but we are where we are,” Johnson recently complained. “We have to build on that and get into live events, mobile phones, computer games perhaps, music — and we have to get a move on.”

It’s a far cry from early 2004 when regulator the Office of Communications (Ofcom) appointed Johnson chairman of C4, amid industry fears that he would sacrifice edgy output to boost the bottom line.

The pair has managed to retain the former and achieve the latter.

While the BBC and satcaster British Sky Broadcasting are cutting costs, Duncan is in the unusual position of sitting on a £188 million ($338 million) cash pile, thanks to a strong recent performance. He intends to spend it on “sensible, smart investments” over the next couple of years.

In May, Duncan reported an after-tax profit of $83 million, up 34% on last year, due to record ad revenues and a threefold profit rise at commercial arm 4 Ventures. C4’s program budget is $873 million, but that could increase to $900 million by the end of the year if ad revs hold up.

Careful sales chief Andy Barnes has warned of a slowdown coming in the latter half of the year — and Johnson and Duncan insist that in the long term they will need a public sub — or abandon public service.

But they are still making expansion plans.

One possibility is that C4 will bid for UKTV, the BBC-/Flextech-owned channel business likely to be sold off as part of the imminent merger between cablers Telewest (which controls Flextech) and NTL.

The BBC must approve the sale, but given C4’s public service remit, UKTV would be a neat cultural fit and is unlikely to be opposed by the pubcaster.

It would also put C4 in a powerful position in the multichannel marketplace — and infuriate rivals, who, until now, have tended to underrate Duncan because of his marketing background. Infact his biggest strength is his ability as a strategist.

It is too early to tell if Duncan’s strategy will succeed and how the relationship between him and his very different chairman will shake down.

When Johnson appointed Duncan 11 months ago, staffers had to be told who the latter was.

His dress code of T-shirts, sneakers and jeans is so informal he makes documentary maker Michael Moore look like a stuffed shirt.

And he’s highly unlikely to take his family to one of Johnson’s upmarket eateries such as the Ivy, on the edge of London’s Soho, which attracts a high-flying showbiz clientele.

Their differences continue in the boardroom where Johnson can be pretty feisty, unlike Duncan, who hates confrontation.

“People thought that Luke would push Andy around, but that hasn’t turned out to be the case,” says an insider. “He is a lot more hands-on than previous chairmen, but it is Andy who is running the show.”

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