Forget Katie P and Katie H, C5 has gone subtly upmarket
Celebrity Big Brother’s Katie Hopkins
There are changes afoot at Channel 5 and Dominic Mills reckons the broadcaster has Channel 4 in its sights. Can the cheeky runt of British TV overtake its rival?
They say that revenge is a dish best served cold, so I was amused to see that Viacom, the new owner of Channel 5, earlier this month fired its media agency. That was PHD, one of the Omnicom agencies which last year took all its business away from the channel and, to date, has continued to blacklist it.
It’s an entertaining sideshow of course, which distracts from the bigger picture of a more fundamental change at Channel 5.
One example: just before Christmas last year, I found myself watching a series on the Plantagenets (yeah, I know, it’s a middle-aged bloke thing), billed as Britain’s bloodiest dynasty. History – it’s the new black.
Rather to my surprise, it was on Channel 5, a broadcaster whose programming mainlined on cheap trash and wall-to-wall US pap.
What the casual viewer wouldn’t know was that the Plantagenets was co-funded by Aegis, a combination that exemplifies the new approach at Channel 5.
A week or so after I got into mediaeval history, it emerged Channel 5 had picked up the Football League highlights (now a programme close to my heart after Fulham’s tragic plunge out of the Premiership), which it intends to move forward to 9pm from its current graveyard slot on Saturday nights. Smart move!
Putting Celebrity Big Brother, the late arrival of Katie Price, and the one-woman lynch mob that is Katie Hopkins to one side, it seems that without making much fuss about it, Channel 5 has changed.
You can see this best in the programming. Gone is the wall-to-wall CSI, and in its place a mix of factual/observational programming, leavened by a mix of quality, new UK and US drama.
The former category includes programmes such as the natural history series Loch Lomond, more history in the shape of Rome: the World’s first Superpower, and Alex Polizzi’s Secret Italy.
The latter includes Suspects, a British police procedural with Fay Ripley, and Gotham, the US drama described as a prequel to Batman.
What does this mean? Well, it suggests to me that Channel 5 has Channel 4 in its sights, and has decided that a more varied and nuanced programming strategy is the means by which it can overtake it.
As far as I can tell from the figures, the strategy seems to be working: in peak time in 2014, its share of ABC1 adult impacts was up around 1.5%, and that of 16-34 adults up more than 5%.
Of course, none of this is much good if Channel 5 can’t turn its audience into hard cash. But it’s doing a pretty good job. Between 2010 and 2013, revenues increased by around 31%. Last year was blighted by the Omincom/Opera dispute, which cost it about £25m (and who knows what this year, not to mention Reckitt Benckiser’s decision this month to stay away), but if you look at the period 2010-2014, revenues were still up just over 20%.
It helps that Channel 5 is cheap…sorry, good value. Currently, by estimates I’ve seen, it’s about 42-46% cheaper than ITV and Channel 4 on an all-adults basis.
At a time of galloping TV price inflation – in stark contrast to the ‘real’ economy – this makes a difference. As an aside, you’ve got to wonder how much Opera’s decision has fuelled inflation on ITV and Channel 4, while helping pull Channel 5’s prices down. Talk about daft.
One of the interesting things about Channel 5’s business model is the way it has decreased its reliance on traditional revenue streams – spot, sponsorship and digital – in favour of new ones: AFP, co-production, product placement, barter, live events such as the Gadget Show Live and so on.
Back in 2010, I’m told, about 90% of Channel 5’s revenues came from spot; today it is about two thirds.
The current series of CBB is a good example. There’s a twist on the Gumtree sponsorship where, pre-show, users could sell stuff to the BB house and, after the show, the contents of the house will be auctioned off. But watch the series carefully and you’ll also see some artful product placement: brands like Weetabix, Volvic, and L’Oreal.
This non-spot revenue strategy gives Channel 5 some protection from the brutal world of share deals. As the smallest player it is always going to get bullied on share, but since non-traditional revenues are excluded, it can find a way to ease the problem. And it goes down well with agencies too.
Nonetheless, it must be a source of pique to Viacom that it is unable to apply the same commercial approach to its own channels. And what would Channel 5’s Nick Bampton give to get hold of them – all the more frustrating since, at Viacom Brand Solutions, he and his team made their name with this nimble, flexible approach – ?
But MTV, Nickelodeon and so on are tied up via a long-term sales deal with Sky for at least another two years, maybe three. Thus, if Bammo and his boys want a bigger train set, they will either have to move broadcaster or win over some of the sales contracts for non-Viacom channels: UKTV and Discovery, currently with Channel 4, seem like good candidates.
So, marry a re-formatted programming strategy to an innovative commercial approach, and you have a channel with a bright future. That may explain why Richard Desmond was able to unload Channel 5 to Viacom for a 400%-plus profit.
Rumour has it that on the Channel 5 sales floor there is a chart, which shows the trend lines for Channel 5 and Channel 4’s weekly share of impacts. With remarkable precision – and not a little chutzpah – it shows the two lines crossing on 22 November this year.
We shall see. If it happens, Channel 5 will no longer be the cheeky runt causing a nuisance at the back of the class – and relishing it – but a fully-fledged member of the broadcasting establishment.
And who knows, it might even join Thinkbox rather than taking a free ride on all the good work it does for the TV industry.
P.S. Next week’s column will be delivered later in the week than usual. Thereafter, normal service will be resumed.