Channel 5 – is it worth the fuss?

Well, the four bids are in and we now await the less than nail-biting conclusions to ITC deliberation – sometime in November. Why is it that the Channel 5 licence auction – no more than a damp squib in 1992 – has generated fevered expectation this time round? Not because of improved technical specification for the channel. On the contrary, its potential reach is down compared with 1992. Perhaps, then, it’s the fact that Rupert Murdoch is involved in one of the bidding consortia? It’s true his is (or was, until his 2m bid became apparent) the fancied runner – and vociferous vested interests would like to see it nobbled.

Personally, of course, Murdoch’s stake in any winning combination would be very small. But Michael Grade rightly highlights the fact that personal influence is not necessarily equivalent to the number of shares held. More pertinently still, a Murdoch triumph would symbolise all that is wrong with the 1990 Broadcasting Act and Stephen Dorrell’s woefully inadequate attempts to redress it through the cross-media ownership review.

These are genuine enough issues, but what do they tell us about Channel 5’s viability? Precious little. Are we to assume it is some gadarene rush, motivated by little more than an irrational urge to possess the last (quasi-)national terrestrial TV channel? Not exactly. The difference between now and three years ago really comes down to one word: experience. The fact that Murdoch’s colossal gamble with BSkyB has come off, and that niche channels with small audiences are seen to be viable, has made Channel 5 – with immediate access to 58 per cent of the UK population – more of a honeypot. Advertisers, no less than broadcast media owners, will have spotted the potential for further cross-channel sports and entertainment deals that embarrass the BBC by draining it of viewers. How long before tennis goes the same way as football and rugby?

But the BBC may not be the only loser. The time will soon come when stalwart producers of ITV programmes will want to move their products to more profitable network distribution, of which Channel 5 could be a part. What would be the impact on advertisers – let alone ITV – if Granada, a C5 bidder, were finally to move Coronation Street? Superficially, C5 looks like an appetising extra minutage capable of turning the screw on ITV inflation. In fact, the outlook for advertisers is a lot less radiant.