E4 'will be free to air by end of year

Jane Martinson
Tuesday February 1, 2005
The Guardian

Channel 4 is planning to make E4, its main entertainment channel, free to air as early as the end of this year.

If carried out, the decision will have implications for pay-television groups such as BSkyB and cable networks NTL and Telewest. At present, E4 is also available as part of a package offered by Top-Up TV for Freeview viewers.

Making E4 free to air was described as a "longer term" ambition by C4 yesterday. However, the company is understood to have earmarked the end of this year as a possible date for all digital viewers to be able to watch the channel, which currently offers early showings of popular shows such as Desperate Housewives. One executive said it was "not if, but when".

The plans emerged yesterday, when C4 announced that it was looking for a new business director to run a diminished commercial operation at the publicly owned broadcaster.

The restructuring of C4's commercial arm comes after a month-long review ordered by chief executive Andy Duncan. Following the review of 4 Ventures, most of the operations housed in the business arm will be reintegrated back into the main channel.

Kevin Lygo, C4's director of TV, will take control of the two main channels, E4 and More4, as part of an expanded brief for the creative head that also sees him take charge of the editorial content of the channel's education programming.

C4 is not turning its back on profitable ventures, however. "Andy [Duncan] is definitely not saying we are downgrading our commercial ambitions for these channels," said a spokesman. This year, C4 is on course to make a £70m surplus with profits from 4 Ventures expected to more than treble to at least £15m.

Mr Duncan gave credit to the division's management yesterday, which inherited a loss-making division in 2001, but predicted that such profits were unlikely to last. He expects 4 Ventures to break even in 2005, largely because of new terms of trade with independent producers.

C4 is expected to cut some jobs as it looks to expand in areas such as new media. "C4 intends to significantly increase its presence on multichannel and new media platforms," said Mr Duncan. "But I'm committed to achieving this expansion with staff numbers at or below 2004 levels."

Headhunter agency Spencer Stuart has been appointed to look for an executive to replace Rob Woodward, the commercial director who left in December after disagreeing with the strategic direction set by Mr Duncan.

Like Mr Woodward, the new director will have a seat on the C4 board. However, the new post carries responsibility for just two divisions - rights and a newly reorganised new media division.

Yesterday's announcement focused on C4's public service ambitions in revealing the new commercial structure.

"We have an ambitious and exciting vision to strengthen C4's public service contribution across all digital platforms," said Mr Duncan.

The new structure would be "optimally structured to face the challenges ahead and to maximise commercial revenues to help us fund our future strategy".

C4 has estimated that the channel faces a £100m funding shortfall by digital switchover in 2012 because of increased competition. The broadcaster has asked for public funding to help fill the gap.

More money will be invested in the group's new media operations, for instance to "substantially increase C4's interactive, broadband and online public service activities".