If timing is everything, then Alex Mahon’s arrival in her new job as chief executive of Channel 4 on the eve of the final of The Great British Bake Off could not have been planned better. The new-look show’s critical and commercial success has more than justified the £75m spent taking it from the BBC.
Mahon, who turns 44 this weekend, joins Channel 4 from the special effects company behind the films Gravity and Guardians of the Galaxy. Her inbox includes pressure from the government for a move out of London, arresting a decline in TV viewing (especially among youth audiences), a volatile ad market and hiring a new chief creative officer to spearhead Channel 4’s £700m programming budget.
Bake Off is a showstopper
Before the summer launch of Bake Off, the audience figures for Channel 4’s eponymous flagship network this year had been abysmal. Among 16- to 34-year-olds – the broadcaster’s core audience, highly prized by advertisers – viewing was down 15% year-on-year. Viewing among all adults was down 5%. Since the new Bake Off debuted on 29 August, Channel 4’s youth audience has rebounded, with almost 14% growth year-on-year. Adults are up 2%.
Bake Off can lay claim to being the most popular series on UK TV among 16- to 34-year-olds, ahead of Britain’s Got Talent, Love Island, The X Factor and Saturday Night Takeaway.
“This is an incredible turnaround in fortunes,” said Phil Hall, associate director at media buying agency MediaCom. “While Channel 4’s schedule has had plenty of good shows that have helped, the biggest factor has been the one with a great big tent in the middle of a field. It makes the £25m-a-year they paid look very good value.”
Channel 4 says that the show has exceeded all targets, and that the six million average live audience is about double what it needed to break even, making for its biggest commercial franchise since Big Brother departed for Channel 5 in 2010.
Location, location, location
Mahon’s tenure as chief executive will ultimately be judged on the outcome of the fractious battle with government over the proposed relocation of Channel 4 outside the capital. Its former chief executive David Abraham and current chairman, Charles Gurassa, have argued that a full-scale relocation would be catastrophic.
Giving up a base in the capital would, they say, cause 60% to 80% of staff to leave. They point out that almost all Channel 4’s advertisers are based in London, as well as rivals and partners such as Netflix. The broadcaster is willing to spend more money with producers that make TV shows based outside London, and move a small proportion of its 800 staff.
Last week, the culture secretary, Karen Bradley, raised the temperature when she publishing a report that said a full move, combined with increased spending on programme-making outside of London, could create nearly 7,500 jobs and £600m in economic benefits annually.
London-born, Edinburgh-raised Mahon, who has already worked closely with the culture department as a member of the advisory panel on the renewal of the BBC’s royal charter, is likely to agree with the strategic assessment of her predecessor and the board. Both sides have said they are keen to reach an agreement by Christmas – against a backdrop of furious lobbying from cities such as Birmingham, Leeds and Manchester – and Mahon will have to hit the ground running.
Hiring the A-team
Her biggest immediate task is to fill the post of chief creative officer vacated by Jay Hunt, who abruptly resigned in June after missing out on the top job. Hunt’s credits included the big Bake Off bet, delivering the London 2012 Paralympics, commissioning shows such as Humans, Gogglebox and Black Mirror and importing Homeland and The Handmaid’s Tale.
Candidates linked with the role include Ralph Lee, Hunt’s well-regarded deputy, and the BBC3 controller Damian Kavanagh, who has impressed with commissions including teen drama Thirteen and comedy Fleabag. Ian Katz, the editor of BBC’s Newsnight and former Guardian deputy editor, is another name mentioned. Jonathan Allan, responsible for Channel 4’s £1.2bn ad sales operation, who also applied for the top job, is likely to want additional responsibility, having made it clear he is after a bigger challenge.
The Netflix effect
Mahon is facing some difficult strategic decisions to secure the long-term commercial future of the advertising-funded public service broadcaster.
About 90% of Channel 4’s revenues are from TV advertising, at a time when youth audiences are switching off in favour of online services such as YouTube, Netflix and Amazon, and advertisers are questioning where to spend their marketing budgets. One issue is that Channel 4’s remit from the government does not allow it to build a TV production division, as rivals such as ITV have done, to attempt to diversify and strengthen its business.
Channel 4 has said that advertising revenue this year will be £100m less than predicted before the Brexit vote.
“Bake Off hasn’t solved Channel 4’s problems,” says Hall. “There are fundamental issues. Youth audiences are watching less TV and Channel 4 is performing worse than ITV. They are still staring down the barrel of a bad year.”
Ever-bullish, Allan says that, with a strong schedule for the rest of the year, the broadcaster could be looking at a creditable flat year-on-year performance for 2017 against rivals in its share of viewing.
“In terms of advertising revenues for the fourth quarter we might be up year-on-year, the first time since Brexit,” he says. “That is a good signal for next year.”
