Duncan has plenty on his plate at Channel 4

Channel 4 chief executive Andy Duncan tells Media Week how the broadcaster must ride out the economic storm and focus on its core assets.

Andy Duncan, chief executive of Channel 4
Andy Duncan, chief executive of Channel 4

When Andy Duncan took over the big chair at Channel 4 in July, 2004, the broadcaster's footprint had barely expanded beyond the mother channel.

E4 had launched, but was only available on pay-TV platforms. More 4's launch was just on the horizon. Film4 was on the verge of profit, but was also subscription-only. 4Music, 4onDemand and the plus one channels hadn't even been thought of and the whole set-up was lacking a decent Freeview strategy.

That all changed with the arrival of Duncan. Nicknamed "The Implementer" for his can-do attitude while at the BBC, he recalls the challenge that lay ahead was primarily "to help Channel 4 make the transition into the multi-faceted digital world".

The doubters argued that, with his commercial background at Unilever, he wouldn't be as programme oriented as his predecessors or heavyweight enough for the task in hand. Last year's Big Brother racism rows certainly tested his mettle.

But, as former chairman of Freeview, the unprecedented success of which has largely been credited to Duncan, he proved his critics wrong and has risen to the challenge. However, it's no surprise he doesn't believe in resting on his laurels. Finding himself stuck in the middle of the most serious economic downturn of modern times, he has a lot of hot potatoes to juggle.

Channel 4 is carrying out an internal restructure and cost-cutting exercise, which will result in 150 of its near 1,000-strong workforce being made redundant before the year is out. Duncan has to find savings of £100m over the next two years to help the company remain at breakeven. He needs to wear his government hat at all times to negotiate a new funding mechanic that will service the £150m deficit he says threatens the broadcaster's move into a digital world. And he has to find new revenue streams, working only with the core assets, post Channel 4's humiliating exit from digital radio - a project he personally championed - and third-party digital sales, with the closure of 4DS and the termination of nearly 40 external contracts.

Self-confessed optimist
To look at him, you wouldn't know all this pressure rests on his shoulders. A self-confessed optimist, he says he "loves Channel 4 to bits" and knows TV is in great shape and will get through these tough times.

He rejects the notion the internal restructure is an attempt to cost-cut in case the Government doesn't come up with the goods. "Anyone who has run an organisation knows you don't cut jobs or close departments unless you absolutely have to," he explains. "It's not something you enjoy doing, but you have to be vigorous in terms of financial management and while doing less activity, you need less people."

But, he also admits, therein lies a problem. How do you generate new commercial streams with less money and fewer staff? He concedes: "It's a catch 22. However, you have to focus on core assets and make good money from where you have most impact."

The need for a revised funding model, to be decided and delivered by the Government, has become all the more pressing as the economic situation worsens. However, Duncan still refuses to be drawn on which model Channel 4 prefers. He wants it decided by early next year, so the broadcaster can draw on half of its cash reserves of £200m to tide its content budget over to 2010, and for the solution to be in place by the end of 2010.

Rivals have taken issue with Duncan going to the Government with begging bowl in hand, especially when his personal salary has doubled in the past year. Channel 4 is meant to provide a rival to the BBC's public service broadcasting, but without the same levels of scrutiny. There is a concern that Channel 4's creative integrity could be damaged if it takes money directly from the licence fee.

Duncan says: "It's entirely manageable. We are already a public organisation with lots of accountability and governance. Historically, we have been 15% subsidy with free spectrum and 85% self-reliant. That ratio isn't going to change and we don't want a dependence culture. But we do have to face facts."

True to form, he is optimistic there has been a change in government attitude. He should know as he sits on the Government's Creative Economy Board. "The creative economy's percentage of the GDP is growing and the Government has finally realised we're an important part of the economy, which it has tended to ignore in the past because it's slightly disparate as a sector," he enthuses.

Strong position
With the TV trading season upon us, he believes C4 is in a strong position. As an organisation, it doesn't handle any third-party linear TV sales, but he doesn't rule out the possibility a couple of years down the line. He does however flag up 4Music's sales contract, which is with Sky Media, as one he wants back in-house when it expires in two years.

Areas for growth and focus are projects that can be commercialised coming out of 4IP, C4's pilot innovation for the public fund for digital content, and Kangaroo, the online content tie-up with the BBC and ITV, which is bound up with the Competition Commission until February. Online is where Duncan now wants C4 to "punch above its weight".

One area he had hoped would reap major commercial and creative benefits was 4Digital, Channel 4's entry into digital radio. It was meant to launch three stations, but had to bow out due to financial pressures, after hiring a 15-strong radio division. "It has been a casualty of the times and I personally remain a DAB champion."

But now it's all about sitting tight during the economic storm and only focusing on C4's assets. Duncan believes his job isn't nearly complete: "I aim to fully see Channel 4 through the transition to the digital world and make sure we secure this revised funding solution with the Government. So there is plenty of work left for me to do."

CV
2004: Chief executive, Channel 4
2001: Director of marketing, communications and audiences, BBC 1999 European category director, food and beverages, Unilever 1997 Marketing director, Van Den Bergh Foods (Unilever)
1995: Marketing controller, Van Den Bergh Foods (Unilever)
1984-1995: Various marketing/management roles at Unilever divisions Elida Faberge and Brooke Bond Foods

Family: Married with two daughters, Jamie-Lee, 14, and Ella-Maye, 10
Lives: Chaldon, Surrey
Drives: Chevrolet (the family car)
Life outside work: Plays hockey, football, tennis and golf (handicap 18), loves music and regularly attends church
Desert island media - 4onDemand, Sky Sports, Five Live, iPod and internet access

Duncan on ...

His career: The combination of Unilever and the BBC was good preparation for Channel 4. The blend of a strong commercial background with the public service aspect from the BBC has stood me in good stead. I love this job more than any other and like the fact C4 is commercial, but the fundamental end purpose is of a higher level: to make more ground-breaking content with public value.

The UK's need for C4: People want plurality with their public service broadcasting. They don't just want the BBC. They know there are no guarantees as far as Five and ITV are concerned, so we are the only guaranteed bit of the system. People buy into what Channel 4 does - pushing boundaries and being innovative.

Big Brother: The contract ends in two years. I know it splits views, but commercially it's still very successful, so as it stands I expect it to continue. We will be talking to Endemol this time next year.

Future of DAB radio: It needs a platform relaunch, but has to have three aspects in place first: the technology, more content and a marketing relaunch package - but can only do that if there is enough content to market.

Gordon Ramsay Cookalongs: I am not a great cook, but I did the first one and I really enjoyed it.

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