Channel 4 looks to the future

Teachers is one of the channel's key dramas

By Torin Douglas Media correspondent

Channel 4 had trailed its losses well in advance and - since it's publicly-owned, not publicly-quoted - there was no response from the City.

But the channel has faced mounting criticism in recent weeks for its heavy spending - on its digital TV channels, such as E4 and FilmFour, and imported US programmes, like Friends, ER and The Simpsons.

Channel 4 has bought The Simpsons

Channel 4 recently won a ferocious bidding war for the terrestrial rights to The Simpsons, at a reported £700,000 an episode. It saw off both BBC2 - which currently screens the series, winning over 3 million viewers an episode - and Channel 5.

The advertising group Zenith recently accused it of "extravagance", claiming it was spending too much on generous salaries and new channels, while the former head of Channel 5 David Elstein claimed its investments in digital television were not properly regulated.

Downturn

On Tuesday, in its annual report, Channel 4 robustly rejected claims that it was living beyond its means.

Thompson's predecessor, Michael Jackson, took more than a year to establish a new direction for the channel.

Torin Douglas

Despite losing £20.6m after tax, against a profit of £21.5m the year before, it insisted it had weathered the advertising downturn better than its rivals and that its new channels were a necessary investment for the digital era.

Anyone searching for signals that Mark Thompson, its new chief executive, might be about to change the channel's expansionist strategy would have been disappointed.

Thompson, previously the BBC's director of television, resolutely defended the channel's performance.

He said: "Channel 4 performed better than its main rivals in 2001 in the most difficult market conditions for a decade, but we could not escape the effects of reduced spending on TV advertising, which pushed us into the red."

New services

He rejected suggestions that FilmFour and E4 were a distraction from its main business, saying that audience fragmentation and the arrival of new technologies meant Channel 4 had no alternative but to develop new services and revenue streams.

And he claimed the backing of the Financial Times which wrote that any other policy would be "catastrophic".

Channel 4 insiders also took the opportunity to dismiss suggestions in the Sunday papers that the company's first financial loss in a decade threatened long-established productions such as Brookside.

And they defended the purchase of The Simpsons, saying it was 'an exceptionally good buy' because its repeats attracted almost as many viewers as the first showings. Channel 4 will take the series over in 2004.

On-screen activity

So is nothing going to change under the new chief executive?

< The long lead time in programme-making means all television change happens slowly, and - in any case - there is already a director of programmes, Tim Gardam, to lead the on-screen activity.

Thompson's predecessor, Michael Jackson, took more than a year to establish a new direction for the channel.

But with last year's annual report - and the 2001 losses - out of the way, Thompson is now very much in charge, and it should not be long before he starts to make his presence felt.