Media: Just look who's laughing now: ITV struggles to make us watch; the BBC battles with its own bureaucracy, and Channel 4 is running off with viewers. Michael Grade tells Maggie Brown why (CORRECTED)

CORRECTION (PUBLISHED 21 OCTOBER 1993) APPENDED TO THIS ARTICLE

While commercial television has been struggling to cope with the maelstrom unleashed by the Broadcasting Act, Channel 4 and its chief executive, Michael Grade, have emerged clear winners.

Further, if you compare Channel 4 with the BBC, whose staff are absorbed in the cultural revolution of producer choice, then it appears, as delegates to the bi-annual Royal Television Society Cambridge convention remarked last month, as an oasis of calm.

This is remarkable when you recall that at the previous convention, in 1991, Mr Grade was facing serious flak from his contemporaries both for negotiating himself a 'golden handcuffs' deal worth pounds 500,000, with more modest loyalty payments for other executive directors, and rewriting the channel's vaguely worded minority remit.

Channel 4's current audiences are gently rising at a difficult time for all broadcasters: it expects to account for 11.1 per cent of total viewing this year, compared with 10.1 per cent last year, also a record. Its finance director, David Scott, estimates its share of terrestrial advertising and sponsorship, excluding satellite, will be 21 per cent (last year it was 19.9 per cent). And for those who question its ability to innovate, executives reach for three words: The Big Breakfast.

None of this was preordained. Under the Act, Channel 4, 11 years old this November, managed to escape privatisation, but was turned into a public corporation, with control for the first time over the sale of its own advertising revenue.

But it was given a financial safety net, which requires ITV to bale it out if annual income should fall below a 14 per cent share of commercial revenue. In return for this, Channel 4 must, in good years, divide the cash surplus with ITV, and build up a reserve fund.

This means that the prospering Channel 4, the protected infant, will be writing ITV a fat cheque when 1993 ends and, quite probably, for years to come. 'We're in the happy position of subsidising ITV,' says Michael Grade with a grin. It is also able to increase its pounds 184m programme budget across the board after three years of recessionary standstill, with a further boost planned for 1995.

'Basically, we had the good fortune to have more notice about our future than anyone else. We knew from 1989 onwards what the political deal would be, having won the desperate battle for the channel not to be privatised, though it was a very, very tough battle and we went to the wire on it.

'We appointed an advertising sales team two years ago. We have a very consistent editorial team (though Liz Forgan, former programme director, has moved to the BBC). We've had time to concentrate on the quality of programmes.

'It is a miracle that ITV has been able to maintain its huge share of the audience and wide range of output this year despite the huge constitutional changes that have taken place. We've had none of that upheaval here. It takes three years to get a channel exactly how you want it. It has taken us three years to get here.' Grade says he has had to fine- tune every corner of the channel to maximise its audiences: 'For example, a Dispatches programme should attract 1.5 million viewers, maximum, so you make sure it gets it.'

The key to scheduling programmes (knowing where to play things for maximum effect, which is his gift), lies with commissioning. 'You can't turn lousy programmes into a good schedule,' he says. But you have to know where to place them. He pours scorn on the current move within both ITV and the BBC to commission programmes for precise slots. The process, he says, has to start with ideas.

He recalls one of his earliest decisions on arriving at the channel in 1988 - to buy the Oprah Winfrey show, which he spotted while in America. Grade's schedules now use it to bridge the gap between Countdown, its golden oldie afternoon game show, and the children and teenage 'happy hour' between 6pm and 7pm, when Channel 4 plays programmes such as Gamesmaster and The Crystal Maze against BBC 1 and ITV news programmes.

Grade heats up at the suggestion that Channel 4 has achieved success this year by cynically popularising its schedules. Its policy of screening popular films has already infuriated ITV, which is bound by the new licences to cross-promote rival Channel 4 programmes. Earlier this month, for example, Channel 4 slipped in Nuns on the Run.

'It's a popular British film; no one programme characterises the channel. What about Derek Jarman's Blue? No one programme defines Channel 4's remit: its like saying Radio 3 can't play Ravel's Bolero. Nor have we moved Channel 4 News or shortened it, or put on American movies and mini-series at peak time.

'The schedule has all kinds of current affairs, Cutting Edge, Rear Window, Without Walls, the Homeless Season, the Bosnia Season.' Channel 4, he believes, is the first place of call for home-grown talent, though some, like Clive Anderson, can hardly be called a new find.

On the vexed question of where news programmes should be played, a row engulfing ITV and News at Ten, Grade says: 'We will look at where ITV puts it. I don't think anything has to be at 10pm.' If he were running ITV, he says, he would be tempted to move the ITN news programme to 9pm, broadcasting directly against the BBC. Even if ITV moved its news to 7pm he thinks it would be short-lived and that Channel 4 News would stay put, because it is such a different programme.

Channel 4 has sealed a five-year supply contract with the ITN Channel 4 news team, securing it until 1998. 'It is one of the real jewels of our crown. This is an enormous vote of confidence in the people.'

Channel 4 could, of course, move its news to 10pm, a shift that would probably suit London audiences who are still slogging their way home at 7pm, but it is precisely at this point in the evening that Michael Grade starts aggressively scheduling to woo adult viewers with films and comedy.

But the real damage done to ITV has been at breakfast time, with the September 1992 launch of The Big Breakfast. Its success increased breakfast audiences but compromised the future of GMTV by creaming off its audiences and child-geared, Christmas-oriented advertising. Grade says: 'It's competition. The genie is out of the bottle. We're not beating them with a TV-am clone.

'The Big Breakfast is really the channel at its best. We took the view we had to break the mould. We had a perfectly good show going nowhere fast, which the audience had rejected.

'We all laughed at this barmy idea from Planet 24 (producers of The Big Breakfast). But they did two pilots and it was very clear that this was the one. The rest is history. The show is a phenomenon. It's like a Swiss watch, made with a lot of care and thought. It will continue,' he shrugs, 'until the audience tells us they have had enough.

'I didn't spot Chris Evans. He had been on TV-am. When we told them what we were doing, they said: 'Chris Evans? He's useless.' '

As for the future: Michael Grade, who was managing director designate of BBC Television until he abruptly left in 1987, leaving the field clear for John Birt, has a contract with Channel 4 until 1996. He seems surprisingly mellow. After two very public but failed romances, he says he likes nothing better than a TV dinner.

He has apparently been rebuffed in an attempt to build a parallel film career through a pounds 400m bid to buy Rank's film interests (wishful thinking because Rank is not a seller), but he's not talking about that.

Nor is he likely to work for Rupert Murdoch in future. 'I think the BBC will live to regret its relationship with BSkyB. Sky's got more money than anyone at the moment. But I don't know anyone who has ever got the better of Murdoch in a deal.'

CORRECTION

The interview with Michael Grade on yesterday's media page contained an error: the figure of 21 per cent referred to Channel 4's expected share of terrestrial television audiences during 1993, not the share of advertising it expected to win.

(Photograph omitted)