±±¾©Èü³µpk10

In the run-up to its fifth birthday on March 30, Channel 5 has been making a lot of noise.

It began last summer, when it brought in Kevin Lygo, head of entertainment at Channel 4, to be its programme controller. Lygo, whose commissioning successes at C4 included Graham Norton and Trigger Happy TV, was told to drive C5 toward a younger, more upmarket audience, the premier target of advertisers.

Shortly afterwards, the channel surprised many by snatching Aussie soap Home and Away from ITV, pulling in one million mainly youth viewers to the station.

Then in February this year, C5 hired former MTV UK & Ireland vice-president for marketing and digital channels David Pullan as marketing director.

Pullan has since triggered a review of C5's advertising out of incumbent agency Walsh Trott Chick Smith. An appointment is imminent.

So why all the fuss?

"When you're in puberty you're kicking and screaming to be noticed," says Nick Milligan, C5's deputy chief executive and sales director, who co-founded the station with chief executive Dawn Airey. "We're definitely growing up. Now we get 'pick of the day' in the various TV previews two or three times a week. That was unheard of before."

And Pullan says the new marketing strategy will be more mature to reflect this. "Looking ahead I want C5 to sit between ITV1 and C4 in terms of youth viewing profile and total audience share."

Fine words. But how far has C5 really come from early perceptions of it as the shoestring channel, plagued with reception problems and filled with soft porn?

"C5 used to be hard to sell to clients because it was seen as a nothing channel, but it has begun to be taken seriously,

says Clive Reed, broadcast director at Optimedia. "Viewers and some advertisers are starting to appreciate its shift toward showing more documentaries and dramas and there's more for C4 types."

While most media buyers believe C5's arrival has shaved around 3% off commercial TV rates, not all big advertisers are sold on its overall contribution to broadcasting.

Bernard Balderston, associate director, UK media at Procter & Gamble, says: "What if C5 didn't exist? In the grand scheme of things, our costs would be a bit higher and we would lose a number of high-rating specials, but that's about it."

"C5 is easily substitutable,

says GlaxoSmithKline UK advertising director John Blakemore. "It hasn't brought anything to the consumers they can't get elsewhere."

Despite such scepticism, David Elstein, former chief executive of C5, believes the channel has a bright future: "Here is a service most people wrote off before it launched. It had to spend £165m on a technical nonsense called 'video re-tuning' and has just survived the worst downturn in advertising history."

Meeting targets

Elstein has a point. The channel has fared well under the new BARB measurement system.

It scored 11.5% of the audience for commercial channels in February and touched 10% of the prized 16- to 34-year-old audience for the first time.

While its demographic is still considerably older and more downmarket than C4, the improvement has now made it a more serious head-to-head competitor to ITV1.

The forthcoming Freeco initiative could provide another boon for the channel. This digital alliance of the terrestrial broadcasters plans to develop a set-top box, retailing at under £100, which will ring-fence all their digital offerings.

This could enable C5 to reach large swathes of the Home Counties it currently bypasses - only 38% of this region can currently access the channel on the analogue signal - and potentially attract more affluent advertisers.

Senior executives must now mount a more serious challenge to established commercial stations.

Milligan describes C5's brand values as "always daring to be different, to be the most operationally efficient channel, and to employ guerrilla tactics".

During the dotcom boom, the channel seized large chunks of dotcom brands' advertising by striking unusual airtime-for-equity deals with the likes of ShopSmart and Firebox.com.

ITV marketing director Jim Hytner, architect of much of that activity during his stint as C5's marketing director, says: "We set out to be the irreverent ballsy challenger that unashamedly made mistakes. But it was a great launch platform."

The channel's irreverent attitude was famously manifested last year when C5 booked cheeky perimeter ads during a Roma v Leeds UEFA cup match, broadcast on BBC One. The hoardings sported the '5' logo with the advice: 'Liverpool live on the other side'.

But Pullan, Hytner's successor, is a fresh arrival to the channel and therefore unencumbered by any sentiment toward that early brand baggage.

He is clearly eager to instigate a change of tack.

"We need to evolve because the product is changing. This means improving the quality and tone of programming and becoming more assured,

Pullan says. "This year is all about a step change in programming and business performance. Media brands are interesting animals. They don't work in a vacuum. You have to strive to bind together the various strands of programming into the overall brand message."

But, he says, becoming more assured doesn't necessarily equate to becoming more serious.

Pullan stresses he's keen not to lose the station's "cheeky, irreverent tone,

personified by former That's Life presenter Bill Buckley, whose self-effacing voiceovers have laced the end credits of many a late-night C5 flick since launch.

Question of funding

But the big question is whether C5 has the necessary funds to move on to the next level.

Although it was the only commercial broadcaster to have increased its programming budget this year, the hike was a mere £3m. With a total budget of £149m, this still stands at one-third C4's and one-fifth of ITV1's. The company employs just 242 staff.

After a heroic bid, it recently lost the rights to The Simpsons to C4, highlighting the fact that if it is serious about taking over any of the terrestrial players, C5 needs serious money to put where its mouth is.

"It's too easy for Lygo and the new regime to say all that's gone before was crap TV and that they're going upmarket,

says Hytner, "But it's hard to achieve that without big money. Home and Away was a great deal, but it needs ten more of those to make the business plan work."

Hytner reckons the shareholders need to pump in an extra £50m to achieve Milligan's aspirations.

Universal McCann chairman Chris Shaw is even more blunt. "Programming budget defined the success of Sky in the early days. C5 hasn't got the movies, sport or sex to survive in a multi-channel environment,

he says.

Although majority shareholder RTL reaffirmed its commitment to C5 earlier this month, it seems that this isn't backed by the investment hike most observers see as crucial to secure more heavyweight programme rights.

And present competition rules prevent another option for C5: Sky muscling in to take a majority stake. In any case, as Rupert Murdoch said late last year: "If Sky was to take over C5 and it happened to make a great success of it, all we would earn is a lot of abuse and extra taxes."

As it celebrates five years in broadcasting, C5 can rightly be proud of achieving its 6.7% audience share with a small programming budget.