David Prosser: A salutary lesson in TV economics

Outlook Channel Four no doubt has all sorts of cultural reasons for dropping Big Brother after a final series next summer but, as ever in television, the biggest imperative is a financial one. With hindsight, the beginning of the end for the show on mainstream telly in the UK – though note that Endemol licenses it to 66 other countries – came in 2007, when Channel Four signed a contract with the production company for three more series.

At the time, the channel could not envisage a future without the financial comfort that Big Brother then provided. It was making getting on for £70m a year of profit from the show, providing a whacking subsidy for programme making that might be considered more worthy but which certainly wasn't so lucrative.

Then along came ITV. The threat of the commercial network snatching Big Brother from under its nose forced Channel Four to seriously overpay to keep its prized asset, just at the wrong moment. Even with the show's peak viewing figures, it would have been a struggle to make a decent return on the £180m three-year contract currently in operation. Having seen audiences dwindle to 2 million this year, Channel Four is barely turning a profit on its former cash cow. Against that backdrop, the broadcaster simply can't justify signing another contract once this one expires.

Don't, however, assume that UK audiences have seen the back of Big Brother for good. Digital channels' fortunes can be transformed with a hit show. And with an audience of 2 million, almost entirely from the 16-24 demographic that advertisers love, this remains a hit show. Sky One is certainly a candidate to step in once Channel Four pulls out, but there are plenty of other contenders too.