Ian Burrell: Is Channel 4 a sinking ship – or is it just in need of a shake-up?

It has lost goodwill in the independent production sector, the lifeblood of its creative ideas for decades

To the casual observer, these are good times for Channel 4. Cathy Newman, the indefatigable Channel 4 News presenter, has run the Liberal Democrats ragged over the Lord Rennard affair. The broadcaster has just retained the rights to the Paralympics after its ground-breaking coverage last summer.

Fighting discrimination and doing things differently, it's what Channel 4 was set up for, 30 years ago last November. But something has gone awry at Horseferry Road. The broadcaster's ratings for the first two months of the year have been falling and, in what some regard as a pivotal moment for the industry, the main channel has seen its audience beaten by those of the combined ITV digital channels. BBC2 – its traditional rival – is a resurgent Channel of the Year, Sky has emerged as a wealthy new competitor and BBC3 has become the destination for risky comedy.

Most alarmingly, it has lost goodwill in the independent production sector, the lifeblood of its creative ideas for three decades. Some companies have stopped working for Channel 4 altogether, because they find the production process so painful. For an indie producer to abandon what was once the "Hollywood" of British television is a sacrifice indeed.

How serious is the problem? The three senior figures at the broadcaster – the chief executive, David Abraham, the chairman, Lord Burns, and the chief creative officer, Jay Hunt – were all seen as laudable appointments when they were announced. But as they have built their new regime, with a mission for "creative renewal" in an era beyond Big Brother, they have caused inevitable disruption.

Last week's decision by the Chief Operating Officer, Anne Bulford, to quit for Tony Hall's new set up at the BBC is just the latest in a long line of departures.

Channel managers Rosemary Newell and Jules Oldroyd, the head of drama Camilla Campbell, the head of comedy Shane Allen, the head of E4 Angela Jain, the head of More4 Hamish Mykura and experienced features chief Sue Murphy (responsible for key shows such as Gordon's Kitchen Nightmares, Undercover Boss, Embarrassing Bodies and Grand Designs) have all left in the past two and a half years.

Channel 4's recruitment of senior figures from the BBC – which of course makes most of its content in-house – has changed relationships with programme makers. Commissioners are said to act more like producers, micro-managing programme formats to a point where they barely resemble the original concept.

Some of the broadcaster's stars have been unhappy at their treatment. The brilliant Chris Morris, creator of Brass Eye and Nathan Barley for Channel 4, is concentrating on films after being given short shrift by the network over a recent satirical format idea.

Charlie Parsons, creator of Channel 4 icons such as The Big Breakfast and The Word, broke cover last week to tell Broadcast magazine that "something has gone hideously wrong".

Most other companies are too afraid to risk future business by being openly critical. But John McVay, chief executive of the trade association Pact, said: "A number of concerns have been raised about Channel 4 by Pact members to Pact." Parsons held talks with Abraham and Lord Burns, where the channel chiefs produced data and polls which they said contradicted any suggestion of crisis. And here we come to the other side of the story.

The broadcaster, which is anxious to have dialogue with its critics, commissioned 460 independent companies in 2012, an increase on the previous year.

Channel 4 had not previously worked with 30 per cent of them, some of which are based in Northern Ireland and other broadcasting outposts.

Television executives do tend to ride a merry-go-round. And those who have departed from Channel 4 were accused of running a closed shop, which Abraham and Hunt are now trying to open up. This, no doubt, explains some of the current animosity as favoured companies face up to having less of the pie.

Some in the television production world find it difficult to deal with the commissioning team set up by Hunt, a fiercely intelligent former controller of BBC1. But this is not a black and white picture. One serious documentary producer offered nothing but praise for Hunt, who has a strong background in journalism. Someone else told me: "You are either a Jay Hunt person – or you're not a Jay Hunt person."

The new Channel 4 is bravely trying to wash its face commercially, struggling to reach the key 16-34 demographic, which advertisers demand, while hosting great public service television on Channel 4 News and its generously resourced Paralympics programming.

Its portfolio of channels, including E4 and More4, is performing well – especially with younger viewers.

There is pressure to meet audience-share targets for the main channel of around 6.9 per cent. But in tough conditions – the share is down to 6.25 per cent, including the catch-up channel – the temptation grows to schedule weekend action films and other solid ratings providers, such as back-to-back episodes of Come Dine with Me. Risk aversion is not what Channel 4 was set up for. "She's turning the Conran Shop into British Home Stores," says one Hunt critic.

The network cannot afford to be bland. The Daily Mail – so often a barometer of the broadcaster's radical spirit – rarely seems riled by the network these days, save for its irritation at some coarse humour on the Big Fat Quiz of the Year.

And viewers weren't inspired by Hotel GB, a recent reality programme designed to remind them of the channel's big names, from Gok Wan to Mary Portas. This broadcaster needs some new stars. But without the support of the indie sector that won't be easy.

Surprise candidate for top BBC role

There are still major unfilled positions at the BBC ahead of Tony Hall's arrival as Director General next month. The one discussed most feverishly is the Director of News role vacated by Helen Boaden as she moves to radio.

It's a job that requires an incumbent to go out and represent BBC journalism, rather than edit newspaper style. So it's surprising that the former editor of The Times James Harding – whose paper was anything but a cheerleader for the BBC under his stewarship – has been suggested as a contender.

It would, I suppose, give the BBC a frisson of pleasure to slight Rupert Murdoch by hiring someone he crudely forced out. Since Harding was replaced by former Sunday Times editor John Witherow it's been interesting to watch the front page of "The Thunderer" embrace the old broadsheet-style layout of its Sunday sister, which Witherow edited for 18 years.

It doesn't work in a compact format and I expect The Times – which learned this painful lesson when it followed The Independent and went compact in 2003 – to quickly abandon it.

Rather than Harding, Hall is likely to appoint internal candidate Peter Horrocks, Director of World News. Or he might turn to a director of similar vintage to himself.

Having just conducted an investigation into the BBC's mishandling of the Savile affair, the former Sky News editor Nick Pollard also finds himself being mentioned in relation to this plum BBC vacancy.

Time to wave goodbye to workies

In the media business, the mantra of "it's not what you know, it's who you know" has become so accepted that it has greatly evaporated the pool from which the industry draws its talent. You don't work your way up from tea boy or tea girl anymore. But unpaid work experience might be on its way out.

Art Council England (now run by Peter Bazalgette, though he can't claim the credit for this) will today announce £15m in grants for creative businesses, but only those that do not have a policy of using unpaid interns.

For Martin Bright, Spectator columnist, Jewish Chronicle political editor, and director of arts and media employment charity New Deal of the Mind, such a signal is long overdue. "It cannot be acceptable that talented young people, who just happened to come from less affluent backgrounds, are blocked from getting some of the most exciting jobs on offer," he says.

Twitter: @iburrell