Staying alive on Channel Dive

Last night's England v Poland match: the kiss of life for a new television station, or a desperate pounds 1m gamble?

High noon came at around 9pm yesterday evening. That was when we could weigh the hard evidence on whether they really are world-class players, confident in their expectation of hitting the big time, or if more nerve-wrenching uncertainty lies ahead.

I am not talking about England's footballers, but Channel 5, the two- month-old television station that invested pounds 1m worth of its own hopes on televising the World Cup qualifier at Katowice.

An alien landing in Britain last week and pressing button five on the television set might have gathered that the nation had been talking of nothing but last night's match for days. Nearly all sports news bulletins trailed the game. There were expert assessments of the form, backed up by dispatches from the spot through crackly telephones.

In between, the channel carried promotional adverts for yesterday's contest - the most baffling of them featuring a man in a crowd shouting manically while pulling a red England shirt over his head.

Now it's the morning after. How was it for you? Was it all worth it? Or are David Elstein, Channel 5's boss, and Dawn Airey, his director of programmes, staring at the bill, scratching their heads and wondering how they could possibly have thought of paying so much? More important, what do they do for their next trick?

Without a doubt, the match will have gained Channel 5 its biggest audience to date, perhaps half as many again as the previous high of 2.85m achieved by the cross-dressing movie Mrs Doubtfire. Many who watched the football will have stayed tuned for the England-Argentina rugby match that followed - though this was not shown live, as Channel 5 had originally planned, because the Argentinians refused to play at their lunchtime, which led to a clash of starting times.

Mr Elstein knows that some of those who watched last night's games were tuning to his channel for the first time. He hopes that, now they have found where the 5 button is, they will press it more regularly. Maybe they will. But today, when 5 goes back to its regular schedules, none of its prime-time programmes will attract an audience of more than one million viewers - not the game shows, the film The Elephant Man or the rerun of the vintage American series Twin Peaks.

Press reports last week said that, because of low viewing figures, Channel 5 would have to undergo a "costly relaunch". Air time buyer Zenith Media reduced its forecast of first year revenues by 16 per cent from pounds 95m to pounds 80m. How would this play with its backers, which include Pearson, owners of the Financial Times, and Lord Hollick's United News and Media?

Mr Elstein says his first year revenue target has never been higher than pounds 80m. Moreover, there will be no relaunch because things are going swimmingly: "The audience is just a smidgen below what I thought it would be at this stage because people have tuned in rather slower than I hoped," he says, "But I'm not concerned. I'd have wished for more rapid penetration but we'll have to try that little bit harder.

"In programming there's plenty of room for improvement, but there was always going to be, and one or two shows might not make it to a second season. Stories of crisis are not only wrong but ludicrously premature."

THE LATEST figures show that the channel is gaining only 2.5 per cent of the total viewing audience. This amounts to half Mr Elstein's stated target of five per cent by the end of its first year, which he still hopes to meet.

But the audience now is less disastrous than it seemed at first. So far only 60 per cent of the country's homes are within range of the Channel 5 signal. At the end of the summer nine new transmitters come on stream, boosting coverage to about 80 per cent of homes.

The last national channel to be launched was Channel 4, in November 1982, and there are some intriguing parallels. It too had a bad press to begin with ("Channel Snore", the Sun dubbed it). After two months its audience share, at 2.8 per cent, was close to Channel 5's present level. This is an encouraging precedent, for it turned out to be Channel 4's low point, and it quickly found its feet. Now it enjoys an audience share of more than 10 per cent.

Yet that launch was 15 years ago, and there are two important ways in which times have changed. The first is a steady year-on-year decline in all television viewing, particularly of the two main general entertainment channels, ITV and BBC1.

The second change is that competition to the main national broadcasters now comes from some 70 smaller channels available on the satellite and cable systems which are now installed in a quarter of British homes. These account for 11.4 per cent of all viewing - up from 9.3 per cent a year ago, largely because of the growth of sports channels.

A report last week from the Institute of Practitioners in Advertising forecast that non-terrestrial channels would very soon overtake BBC2's 11.7 per cent share and, taken together, become the third force in television after ITV and BBC1.

The growing success of specialised subscription channels has raised fresh doubts about the wisdom of launching a new terrestrial general entertainment channel such as Channel 5 in the final years of the century. It is like starting a stagecoach service from London to Birmingham in the era of the steam train.

Many of the new satellite and cable channels are precisely targeted at niche markets, mostly including young adults. These bring in revenue from advertisers who would not buy time on a general channel.

And there is growing synergy between these new channels and the Internet. All have their web sites that attract the channels' devotees and support their programming. This development could become more significant as digital television comes on stream, when the TV set and the computer screen will become effectively interchangeable. Television's main role could then switch from providing entertainment to being an information source and, ultimately, a means of communication. So, where does a terrestrial entertainment channel fit into that pattern?

NONE of this futurist talk impresses Mr Elstein. "Just ask Rupert Murdoch what he's spending most of his money on. He's buying 10 good old-fashioned free-to-air television stations for three billion dollars.

"In Germany digital TV has flopped, and I'm sceptical about how well it will do here. On satellite, specialised channels don't do as well as Sky One and UK Gold, which are general entertainment channels. In the United States, the four big networks get 60 per cent of the audience between them and have huge revenues."

Nothing will dent his confidence. He reports that the initial problems with retuning millions of video recorders, to prevent interference with the new channel, have been resolved.

"I'm a professional optimist. We've got through the most difficult points. We hit our launch date, and retuning is almost all over bar the shouting."

He concedes that there are failings in programming, but insists that this was only to be expected when so many new shows were being launched at once. Those that look best are the ones that were well-prepared in advance - the 8.30 news, the soap opera Family Affairs and Night Fever, a Saturday night karaoke singalong that ITV have already tried to poach, unsuccessfully.

Mr Elstein admits to weaknesses in some strands, including the morning news and Exclusive, a televised gossip column. He agrees that Jack Docherty's nightly talk show has suffered from his inexperience as an interviewer, and from some dull guests.

The nightly movies, too, have been of indifferent quality. "We're making do at the moment with TV movies and stuff that hasn't had a theatrical release. Our range of movies will improve sharply at the end of this year because of deals we've done with the studios. That's the backbone of the schedule in terms of impact."

Some new American programmes could also enter the schedule as a result of Dawn Airey's visit to Hollywood last week. Although American sitcoms get more expensive as more channels compete for them, Mr Elstein believes that they are still worth the money. "You pay the market price for what you want."

Last night's football cost pounds 1m, he says, but it will earn more than that in sponsorship and advertising. He has also done a deal to televise next season's home games between Chelsea, winners of the FA Cup, and their European rivals.

"Our basic schedule is the bread-and-butter. For the first two years you have to have a lot of jam around in shape of good quality sport."

And after that? "Unless I screw up fairly comprehensively, Channel 5 is going to make a lot of money for its shareholders. My guess is that you couldn't get any of them to sell their stake at the moment for less than 100 per cent premium."

For the time being, caution suggests that the guess is unlikely to be tested.