Five needs to forge closer links with commercial rivals such as Channel 4 or BSkyB if it is to survive in the increasingly competitive multi-channel environment, according to the broadcaster’s largest single shareholder.
Reports suggest that Gerhard Zeiler, the chief executive of RTL, which holds the controlling stake in Five, has confirmed that merger talks have been held with Channel 4 chief executive, Mark Thompson.
The pan-European broadcasting giant is understood to be considering a number of other options as the UK’s smallest commercial channel searches for a partner to strengthen its position in the burgeoning digital television market.
According to the Guardian, Zeiler told those gathered at the company’s annual press conference yesterday: “In the next eighteen months we will make a decision on which alternative we are going to take. What we need is a multi-channel strategy.”
Gunter Thielen, chief executive of RTL’s parent group, Bertelsmann, added that Five would have to link with another broadcaster to achieve this. He said: In the long term, Five is too small. Channel 4 is one option, but we could also talk to BSkyB. But there are no talks at present.”
Channel Five currently has seen its popularity increase steadily since its launch in 1997. However, the channel still only commands a 6.5% share of viewing and RTL recognises it will struggle to tempt viewers away from broadcasters with more developed multi-channel strategies.
It is understood that senior executives at RTL and United Business Media, the minority shareholder in Five, have also held talks with cable firm Telewest, about a possible deal. One option could involve a tie-up with Flextech, which co-owns the UKTV digital channels.
The British broadcasting landscape looks likely to undergo some significant developments over the next twelve to eighteen months. Channel 4 is considering fundamental changes to its structure and BSkyB recently shelved plans for the launch of a new general entertainment channel on the Freeview platform, which could clear the way for a possible deal with Five.
The newly merged ITV is also planning to extend its digital presence with the launch of its third main stream channel by the end of this year. ITV3 will be aimed at older, upmarket viewers with an appetite for drama and could be followed by a channel aimed specifically at children.
