Anniversary tarnished for Channel 4

Pubcaster's profits and practices scrutinized

Twelve months ago, Channel 4, the U.K. hybrid pubcaster famed for backing edgy shows, was riding high. Its strong performance appeared to have vindicated a relatively inexperienced senior management team.

A year later, matters look very different. Heading into its 25th anniversary celebration in November, the broadcaster is under fire from regulators and commentators. The British government — Channel 4 is a publicly owned corporation — warned in June that the station is being “very closely scrutinized.”

Its ratings, which had bucked the downward trend, are falling, profits are down 70% and at this year’s BAFTA TV Awards, the channel managed to bag only two kudos.

In common with all U.K. terrestrial webs, Channel 4 has also been embroiled in the row over cheating viewers in phone quizzes – in this case, via the afternoon talkshow “Richard & Judy.”

Critics also argue the broadcaster’s commercial dependence on mainstream fare like “Big Brother” and “Deal or No Deal” is undermining its public service mandate. Following a major flap over allegations of racism in “Celebrity Big Brother,” a controversy involving 45,000 complaints from viewers, there have been calls for the resignation of CEO Andy Duncan and station chairman Luke Johnson.

“The handling of the ‘Celebrity Big Brother’ row showed up the deficiencies in Channel 4’s management,” a former Channel 4 executive says.

Deputy chairman David Puttman, the Oscar-winning film producer, has indicated he is not satisfied Channel 4 is fulfilling its public purpose.

“I am not proud of the ‘Big Brother’ row — I am not even proud of ‘Big Brother,’ ” he said earlier this summer. “But ‘Big Brother’ accounts for 15% of the total revenue that keeps Channel 4 afloat.

“You have got to go some to replace that, but we will do it at some point — of course we will. We are in a long period of transition, but we will do it.”

Duncan, the first Channel 4 head not to have a programmingbackground, maintains that the review he recently ordered to help define the station’s “public purpose” will help provide a vision that will take the broadcaster into a fully digital era.

“We are looking at some pretty fundamental questions: how we deliver our remit in the digital age, our wider impact on the creative economy and our role in new media,” he says.

“The underlying performance and strength of the channel is very strong. There have been a couple of hiccups in the past year, but we’ve learned from these incidents. … We are taking the whole issue of audience trust very seriously.”

Duncan adds that “the Channel 4 brand is in very good shape,” noting over the past three years, its audience share has held up better than any of its terrestrial rivals.

“We have also made some extremely important strategic advances in recent months including launching our on-demand service, 4oD, winning the bid to launch a radio service and our new joint music venture with Emap,” the British media group that owns radio stations and magazines and runs a number of music channels.

As for suggestions that Prime Minister Gordon Brown, who succeeded Tony Blair earlier this summer, may privatize Channel 4, Duncan is emphatic that the station must remain publicly owned.

“The whole board is unanimous that we should remain for public purpose,” Duncan says. “I find it hard to see how changing the ownership of the channel is compatible with delivering the remit.”

Others, however, might still beg to differ.

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