On Friday night after a day’s zooming and home schooling, Jenny and I watched Gogglebox on Channel 4 by chance.

The reactions of the now-famous TV viewing households to TV moments were reassuringly familiar and funny. Gogglebox is in its 7thyear. It could have the longevity of Have I Got News For You.

This was the first time we had watched Channel 4 – apart from Channel 4 News – for more than 6 months.


Channel 4 is gently losing its relationship with the British public. Less than 40% of the UK population now watch 15 uninterrupted minutes of Channel 4 programming each week.

All broadcast channels face declining ‘reach’ but Channel 4 is the most vulnerable.

The BBC is the national broadcaster with multiple channels, funded by the licence fee; ITV is the dominant commercial channel, has built a strong production business and has access to funding from the markets; Five is part of the Viacom empire; Sky is a subsidiary of Comcast.

Channel 4 has no such security.

The organisation is entirely exposed to the UK advertising market. It is a commissioning organisation and does not make or own its programmes.

Channel 4 was launched in 1982 with a mission to take risks, challenge orthodoxies, reach minorities and represent the young, support the independent production sector and create programming that went beyond the mainstream. Today this mission has become vaguer and more sanitised:

  • To champion unheard voices
  • To innovate and take bold creative risks
  • To inspire change in the way we lead our lives
  • To stand up for diversity across the UK

There have been some remarkable programmes and events during Channel 4’s life that have brought these worthy objectives to life.

The 2012 Paralympics, Skins, Shameless, Big Brother, Black Mirror, Father Ted, Queer as Folk, Grand Designs and The Big Breakfast are just a handful of the programmes that created national conversations and are deeply embedded in my memory.

But it is hard to think of more recent examples.

Today every tribe has its voice on YouTube, unconstrained by a commissioning editor; every broadcaster must take risks to stand up against Netflix and Disney+ budgets; and Joe Wicks, Yoga with Adriene and a million other inspirational influencers are changing lives far more than any broadcaster.

In 2018, the average 18-34-year-old spent 150 minutes per day watching YouTube or Netflix. They spend just 8 minutes with Channel 4.

Where would you put your advertising money if you were targeting this valuable audience?

Channel 4 finances are now under Covid attack.

April’s advertising revenues were down 50% year on year, the FT reports. This is more dramatic than ITV’s 42% drop. Such reductions can be expected for months to come.

This is far worse than the financial crisis. Between 2007 and 2009 Channel 4’s revenues fell by ‘just’ £95m from £945m to £850m.

Now Channel 4 is number two in a commercial TV advertising market hit hard by recession which is also in the early stages of structural decline. TV advertising grew until 2016 to hit £4.3bn but fell to £3.8bn by 2018, according to OFCOM. This figure will surely fall to well below £3bn in 2020.

A proportion of the money lost will never come back. The question is what proportion. Crises propel structural change forwards by several years. Look at how the financial crisis hit the regional newspaper industry – a then highly profitable industry faced challenging trends, digital threats and revenues in steady decline but the crisis hammered revenues and the industry took blows it has never recovered from.

Channel 4’s management response to the crisis shows the scale of the crisis for the organisation – a huge 23%, £150m, cut to the content budget.

If you take Channel 4’s 2018 financial results (the last published) and assume that digital advertising revenues fall 20% and TV advertising by 30% in 2020, Channel 4 falls to a loss of nearly £80m even after the £150m programming spend cut and an assumed 15% cut to other costs.

Cuts to overheads may not be easy. Channel 4 is in the process of moving 300 jobs to Leeds and creating new commissioning hubs in Bristol and Glasgow in the midst of this crisis.

It could be worse.

If digital revenues fall by 35% and TV advertising by 40%, the loss would be £181m.

This is an interesting number - £180m is the cash reserve held by Channel 4 as described in their 2018 annual report. It would then be time to access their £75m credit facility.

Channel 4 faces a creative crisis, not just a financial one.

The channel desperately needs great new shows that will make the channel exciting, talked about, fresh and relevant again.

Fighting for young audiences against YouTube, Netflix, Disney + and a revived BBC is increasingly tough.

In the hunt for older and more general audiences, Channel Four expensively and controversially bought Bake Off but this remains ITV and BBC ONE heartland. Even Five seems to have an interesting pipeline of shows for this audience. We have been tempted by Yorkshire Vet (I’m a Yorkshireman) and Ben Fogle’s New Lives in the Wild (Ben, if you’re reading, my wife would love you to drop round for tea).

Creative reinvention is the job of Ian Katz, the controversial choice as Director of Programmes, appointed two and a half years ago. Prior to his appointment Katz had just a few years of television experience as Editor of BBC2’s Newsnight and had not commissioned programmes before.

I do not envy his job. Commissioning breakthrough shows with a fast-shrinking budget from production companies with more demand for their best ideas than ever before from a range of domestic and global TV companies, some with enormously deep pockets, looks challenging.

Alex Mahon, Channel 4’s Chief Executive and her team face an exhausting list of challenges.

  • Global platforms from YouTube to Netflix to Disney eroding Channel 4’s audience, relevance and reach.
  • New generations of viewers less engaged by the brand and its content.
  • A business model dependent on broadcast advertising, hit hard by Covid and in the early stages of structural decline.
  • No clear route into fresh revenue streams despite initiatives to diversify.
  • Sub-scale in a market where scale and financial firepower are ever more important.
  • Cutting programme budgets to survive when global broadcasters are pumping more money into programming budgets than ever before.
  • Lacking breakthrough, watercooler programming – a problem which is morphing from a dry patch into a drought.
  • Legacy purposes becoming less relevant each day.

It is traditional in such blog posts to now come up with some slightly glib but clear solutions.

But sometimes they do not exist.

Channel 4 may be able to scrabble its way through this crisis but it will come out wounded and the structural issues facing Channel 4 will continue to grow.

Sooner rather than later they will become too great for the channel to survive in its current form.