Four better, or worse?

Marketers contemplating making a leap to senior management may have second thoughts when they look at the immense pressures bearing down on Channel 4 chief executive Andy Duncan.

The former Unilever and BBC marketer has had a rough start to his third year in command of the channel. Last week, C4’s Richard & Judy show was under the spotlight over claims it ripped off viewers phoning in to take part in its You Say We Pay quiz. Phone regulator Icstis is investigating, and C4 has launched its own inquiry. Meanwhile, Duncan is awaiting the outcomes of two investigations into the way the channel handled the Celebrity Big Brother (CBB) racist bullying crisis that blew up in January – one by Ofcom, another by a panel he set up himself.

Amid these two controversies, Duncan is lobbying to ensure that the Government maintains a decent subsidy to C4 – worth up to £100m – as digital switchover looms. Ofcom is conducting an investigation into C4’s finances – at Duncan’s request – and has appointed consultants LEK to look into the business. The Celebrity Big Brother crisis led some MPs to call for C4’s subsidies to be curtailed.

On top of all that, C4 has lost Lost (the popular US series, for which it was outbid by Sky), paid a sky-high £40m for the third and fourth series of Desperate Housewives, and cancelled Wank Week – a series of programmes about that ancient practice – for fear of creating more unwelcome controversy.

Critics say there is a lack of successful new, home-grown formats coming through on C4. Shameless looks tired; and Gold Plated, C4’s answer to ITV’s successful Footballers’ Wives, was critically panned. Over-reliant on Big Brother, and failing to replace many of its most popular formats, C4’s main areas of success have been in downmarket daytime shows such as Deal or No Deal, Richard & Judy and the Paul O’Grady Show.

That said, C4 claims it is rescuing its Friday night slot – which it has struggled with since the end of Friends and Frasier – with Ugly Betty and Charlotte Church. New youth drama Skins is said to be E4’s most successful show to date.

All this demonstrates that having a thick skin is a requirement for any marketer, and this quality appears to have served Duncan well. Others may buckle under the pressure, but Duncan insists he will stick it out at C4 and plans to remain in place for years to come.

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"I’ve had a fantastic three years, but I don’t think it is a job completed," he says. "We have made more progress than I expected we would, we have kept the core channel strong and outperformed the competition by some distance. I’m very committed to staying at C4 and finishing the job of moving C4 into a multimedia, digitally facing organisation. My plan is to stay and finish that off over the next few years."

 Despite calls for his resignation, even rivals do not believe that his job is in doubt, although they are critical of the way he handled the Big Brother furore.

Even so, those rivals are having a field day with some of the current problems. They say Duncan’s inexperience as a programme maker is showing through. Chairman Luke Johnson, founder of Pizza Express, also lacks broadcast experience. One rival says/ "They have a lack of experience there, so when something goes wrong, they get caught out. These are classic compliance issues."

But Duncan responds: "There have always been these sorts of moments. Take C4 over its history, every year or two an issue blows up. There was the Big Brother fight night; Brass Eye."

The channel’s defence of its position on Celebrity Big Brother dribbled out over a few days and it seemed to take an age to wring any sort of apology from Duncan after some 45,000 complaints to Ofcom. Duncan says: "As chief executive, I’m not going to get involved with every decision being made. Part of what we will look at is the extent to which people involved were following the process and where there are things to be learned for the future. When the issue blew up over a 24to 36-hour period, I tried to stand up and explain and offer a robust defence of what we were doing. At the time – and now – it was a difficult balance to strike. I believe it was the right thing to do. We had to recognise that while it was a major controversy it would be right to air the programme."

The Richard & Judy crisis is different. Viewers were encouraged to call on a premium rate line to take part in a competition even after the competitors had been selected.

"It was a very clear-cut thing," says Duncan. "We immediately apologised on the Monday on the programme, we have offered refunds and the remaining money is going to Great Ormond Street Children’s Hospital. We have been congratulated even by the Daily Mirror for taking swift and appropriate action."

On the positive side, Duncan is credited with getting C4 in shape for the digital future and creating a strategy to prepare it for the next five to ten years. He has put its digital channels E4, More4 and FilmFour on Freeview and he is bidding for C4 to run a digital radio multiplex.

C4 is loved by advertisers for offering programmes watched by a large number of 16to 34-year-olds, ABC1 and light viewers, for which it has been able to charge premium rates. However, the channel’s recent successes with daytime programming has changed the make-up of C4’s audience and called into question that premium.

According to Carat media director Steve Hobbs, C4 has to choose between maintaining its share of viewing and keeping up its profile of young and ABC1 viewers. "It can’t do both but I expect it will try," he says.

Duncan adds: "The core channel has held up well, including the profile. Multi-channel has done really well, including with young and upmarket audiences. The proof of the pudding is we have increased our share of the advertising market. We are in no shape or form older or more downmarket, but we are becoming a bit less upmarket and young."

Split on viewing
The channel says it improved share across the core C4 channel and digital off-shoots in peaktime for adults, ABC1s and 16to 34-year-olds between 2004 and 2006. However, Carat’s analysis shows the main channel has lost overall share of viewing and seen a rapid decline in 16to 34-year-old adults and ABC1 adults over the past year (see table). Meanwhile, figures from Initiative show that C4’s share of broadcast advertising revenues rose from 20% in 2004 to 20.4% in 2005 and remained the same in 2006.

Many think C4 is far from being at the top of its game at present. Its reliance on Big Brother – which on average appears one night out of three across the year – has raised questions about what it would do should it lose the rights to the show. With some 200 new shows created a year, things can rapidly change. But C4 needs more peaktime hits.

Further pressure could come from a revitalised ITV under Michael Grade, especially if rumours that he is trying to lure senior members of the C4 team, such as programme boss Kevin Lygo or sales director Andy Barnes, turn out to be true.

Duncan is unphased. "Channel 4 was a team job when I came and it still is," he says. "There is more to go for."