NS Profile - Channel 5

It was once a national joke, famous mainly for pornography; now, it shows TV's old guard how to make

These are dark days in the once glamorous world of television. The formerly unchallenged market leader, ITV, is a smoking ruin. Channel 4 is sacking staff, chopping budgets and rethinking its very purpose. The BBC has so lost the plot that it has provoked a licence-payers' mutiny. Yet amidst this sorry scene an unlikely beacon of achievement burns: it's Channel 5.

Yes, you heard aright, Channel 5, the new kid on the block which began life as an afterthought only to grow into a national joke. Known in its early days as Channel Snow because of the weakness of its signal, it still isn't allowed to cover the whole country lest it interfere with more important things. The last time it impinged on your consciousness was perhaps as Channel Porn, a late-night comfort aid for blokes who can't afford a top-shelf mag. Well, keep up. If you haven't noticed that the fifth is now the hot spot on the dial, the industry certainly has.

Throughout the summer, ITV's bosses were locked in pursuit of the only thing they believed could rescue their ravaged network - Dawn Airey, Channel 5's then chief executive. Unfortunately, Ms Airey let it be known that she could not entertain their entreaties as she was off on holiday up the Amazon. For three weeks, the ITV suits waited with bated breath, only to learn on Airey's return that instead of sorting them out she would be taking control of Sky's £500m-a-year galaxy of pay-TV channels. The news was considered as big a boost for Rupert Murdoch's satellite empire as it was a disaster for ITV.

So how had the gamine chief of such an apparently footling outfit come to be such a hot property? Don't get the wrong idea. You haven't been left alone in front of Corrie while everyone else has decamped to Channel 5. After five years, the newcomer still commands only 6.5 per cent of the TV audience. What you have to appreciate is that this is none the less a phenomenal triumph.

From the outset, those who claimed to know about such things insisted that the new channel would be going nowhere. The familiar networks were being beaten back by multi-channel. How could another steam station with no loyal following to build on hope to get off the ground? Yet when the audience measurement system was updated earlier this year, it emerged that "Five" (as the channel has recently rebranded itself, though no one else has noticed) was attracting not just more viewers than anyone had appreciated, but the kind of viewers that advertisers like. As a result, revenue has increased by 25 per cent this year, while other commercial broadcasters' has flatlined.

Success has not, however, been merely financial. Suddenly, this much mocked TV molehill is attracting critical plaudits, and not just for its popular programmes. Although Five is subject to fewer "public service" obligations than any other conventional station, it has unexpectedly turned into a market leader in serious factual output such as history, science and, above all, the arts, the area that the posher channels have most flagrantly abandoned. Refugees from patronisingly "accessible" shows about serious topics on other channels have found Five's efforts not just refreshingly free from tedious gimmickry, but also surprisingly rigorous and informative.

There are even signs that the older channels may be starting to learn from the newcomer. Some see traces of Five's approach in the BBC's Rolf on Art, though the presenters of Five's arts programmes are not downmarket celebs but genuine experts. Five pioneered the use of comely young newspersons with the dazzling Kirsty Young. Hastily, the big boys tried to catch up by ditching ageing stalwarts and promoting lovelies such as Fiona Bruce and Katie Derham, only to see Five deftly confuse matters by bringing in gnarled hacks such as Sandy Gall and Carol Barnes. It's a matter of "journalistic excellence", according to Five. Will ITN and BBC News now be shamed into following suit?

No one expected the new station to end up teaching its elders what public service broadcasting should be all about. Few had any hopes for it at all, as the circumstances of its birth could hardly have been less propitious. The fifth channel was launched merely to provide a little more choice for advertisers, after boffins discovered a bit of spare space on the airwaves. It was feared that the new channel's signal would interfere with video recorders, so every video in the land had to be retuned. This cost £100m more than expected, savaging the station's finances, even though it later emerged that the whole operation had been unnecessary: videos would not have been affected.

Still, the new operation was not without its strengths. These included one of the sharpest teams that has ever launched a British broadcasting venture. The chairman was Greg Dyke, a true master of cunning. The chief executive was David Elstein, by common consent the most brilliant mind in the business. The programme director was the now legendary Dawn Airey. Airey is no mystic genius. She is just clear-thinking and hard-working, straight-talking and inspirational, unpretentious and good at making decisions, all qualities in short supply in the TV trade. Yet the cleverest thing that this glittering line-up achieved was to avoid the pitfall of trying to be too clever.

The strategy was un- complicated: blitz costs and find gaps in the market. The first gap turned out to be young men. Dyke, fearful of the wrath of his stern partner Sue, tried to disguise his role in the channel's embrace of soft porn. Airey had no such inhibitions: "football, films and fucking", as she herself described the station's early priorities, happened to match her own tastes, and she was not ashamed of any of them. The decision to mate these wares with highbrow material flowed from the original plan. Young males' earthy needs became sated. Where was the next gap? The other channels' Gadarene rush to dumb down had created an obvious opening: older, upmarket males could now find nothing to watch. When Channel 5 offered them The Seven Wonders of the Ancient World, it found three million eager viewers ready and waiting.

Unlike so many media start-ups, this one has done what it was meant to do. Why? Sound strategic thinking has been matched by ruthless efficiency. Channel 4, running a similar operation, has 1,100 employees. Five has 240, about as many as the BBC's lobbying department. Its programme budget is one-fifth of ITV's. Small has proved beautiful. Lack of money to waste on gloss and fripperies has forced programme-makers to concentrate on essentials. Effort their rivals expend on choosing glamorous locations goes instead into the script. Ad sales and marketing are similarly focused. No one entering Five's cheery Covent Garden HQ can fail to be struck by the contrast between its busy hum and the Kafkaesque gloom of BBC White City or the ITV Network Centre.

This cosy atmosphere doesn't stop hardball being played. Two years ago, Airey asked the board to fire Elstein and give her his job. It complied, and Airey went on to sweep out long-standing commissioning staff and put in a raft of newcomers. It says something about the health of Five's soul that today her victims, including Elstein, have nothing but praise for her.

One feature of this happy picture deserves remark. The luvvie establishment, led by Lord Puttnam, is fighting a bill that would open more of British television to foreign investment, thereby, according to Puttnam, ruining it. Yet Five, Britain's most obvious TV success story at present (apart from US-dominated BSkyB), is already foreign-controlled. Sixty-five per cent belongs to Europe's only global broadcasting business, RTL, which is controlled by Bertelsmann, the German media giant.

Alien ownership has not stopped RTL from indulging Five, even though the station's value has yet to exceed what investors have put in. Now, however, Bertelsmann has run out of money. If Five's progress is to continue, it will need more investment. The broadcasting bill would allow Murdoch to buy the station and perhaps turn it into a real challenge to ITV. The problem is less Puttnam's campaign than Murdoch's feeling that he cannot really be bothered with steam TV any more. Five seems likely to get no more out of him than a cross-promotion deal with BSkyB.

So whither our plucky young channel? Airey has yet to be replaced. There is no shortage of candidates to captain this happy ship, yet without fresh cash it is hard to see Five overtaking Channel 4, let alone an ITV that is at last beginning to get itself together. As the weakest of the old-fashioned, broad-appeal stations, Five could find itself horribly exposed as multi-channel continues to make headway. In the end, will its unexpected flowering prove but a brief parenthesis in the story of British broadcasting? Maybe. So make the most of it while you can. Coming shortly on Channel Porn: a ballet about Don Quixote, a film on the Aztecs, a show about Titian, and a Christmas special on religious art.

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