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The overwhelming industry reaction to Five's appointment last week of Jane Lighting as chief executive has been "Who?". But few believe her low profile among marketers will be a problem, either for Five or for advertisers.

The channel is riding on the crest of a strong performance in 2002, in which audiences grew from 5.8% to 6.4% and advertising revenues rose from 6.4% to 7.5%.

Its new on-air look and repositioning away from "films, fucking and football" has been well received. And Lighting joins a team headed by acting chief executive Nick Milligan, who is well known by marketers and agencies alike.

Colleagues at Flextech Telewest speak highly of Lighting. As chief executive of Flextech, she headed its wholly owned channels, such as Living and Bravo, and the UKTV joint venture with the BBC.

Mark Howe, managing director of the company's sales arm, IDS, says: "Jane is a strong leader and very charismatic. She will enable Five to take its next step away from the three Fs."

On how Lighting is likely to relate to Five's management team, he says: "She's very good at recognising talent in her management team and allowing that talent to flourish."

Building on success

But there will be numerous challenges for Lighting come April, when she joins. Not least will be the pressure to build on the successes of the past year.

ITV marketing and commercial director Jim Hytner, formerly marketing director of Five, says: "2003 is going to be a tough year for all of us. I think whereas ITV is battling against a year of perceived failure, Five is up against a year of unmitigated success. Jane and Nick's primary job is to keep that momentum going."

A key difference for Five this year is that its two principal competitors, Channel 4 and ITV, are concentrating heavily on programming; and they are backed by budgets of £836m and £430m respectively. This compares with Five's programming budget of £157m.

Five, which has gained the industry's respect for making its small budget work hard, is bullish; majority shareholder RTL is keen to build the channel's audience share to 10% - within a whisker of C4's. Agency sources say that Five is hoping to grow its share of advertising revenues to 8.5% this year. But observers believe that Lighting and her team will have a big task on their hands.

Procter & Gamble associate director of UK media Bernard Balderston says: "ITV is the natural competitor for Five, as both are entertainment channels. This year Five has a more aggressive ITV on its hands. The ratings are coming back and it is spending a lot more money on screen. My view is that Five will see a flattening off of impacts this year."

The consensus is that to deliver new audiences, Five needs some new programming initiatives. While agencies and advertisers are pleased with the performance of its films and of series such as CSI: Crime Scene Investigation and The Shield, as Balderston points out the effect from poaching Home & Away from ITV two years ago has now gone. "Five needs to pick up a series such as The Bill to establish a longer-term programming proposition," he says.

So squeezing shareholders for an increase in the programming budget is likely to be a major challenge for Lighting - just as it was for her predecessor, Dawn Airey.

Ownership issues

But as the Communications Bill comes into force later this year, Lighting also faces the issue of who those shareholders will be.

The Bill would allow Sky or overseas television companies to take a stake in, or even acquire, Five. If Carlton and Granada are allowed to merge their sales houses, then Lighting will add sales house consolidation to her list of challenges.

Should consolidation be the order of the day, Five's Milligan is believed to be interested in heading a merged sales house operation involving either C4 or Sky. Nevertheless, together with Lighting, he will need to be sure that when the music stops, Five is not left standing on its own.

Further ahead, Lighting needs to consider whether being a one-channel broadcaster in a multichannel world is the correct strategy when all Five's terrestrial competitors have launched digital spin-offs.

As MediaVest managing director Chris Locke puts it: "Five is a single dimension business, but the world is changing. It needs to build a portfolio of channels that will enable it to cross-promote programmes and build bigger audiences.

"Five has done a good marketing job on itself so far, but going forward this will become harder and harder."

Raymond Snoddy, Opinion, page 18

REVENUE AND VIEWING SHARE
          % broadcast revenue  % share adult viewing
             2001      2002        2001       2002
ITV           56.5      53.7       25.95      23.09
C4            20.0      20.2       10.35      10.35
Five           6.4       7.5        5.91       6.44
GMTV           1.9       1.8        1.45       1.57
Sky*           8.5       9.7        6.48       8.43
Other          6.7       7.1       11.32      11.94
BBC One        n/a       n/a       27.52      26.81
BBC Two        n/a       n/a       11.02      11.38
Source: Five
*In 2002 Sky acquired Discovery Channel into its portfolio. Sky figures
are for the portfolio of channels sold in each year