Sex, science and the art of scheduling: has Five become the new Four?

As Channel 4 is attacked for drifting downmarket, its younger rival is making profits after ditching sleaze and winning over critics

The headline "Teen Sex TV Outrage" greeted the news last month of the reality television programme 14 Alone in which a group of teenage boys and girls are filmed after being shut away together in a house for five days and nights.

It was part of a series of programmes on teenage sex broadcast by Channel 4, which also includes the show Porn To Be Young. Compare this with rival Five's autumn schedule that included the programme Every Picture Tells a Story, in which art critic Waldemar Januszczak examines works such asThe Anatomy Lesson by Rembrandt and The Arnolfini Marriage by Van Eyck.

For Five, which announced yesterday that it had earned its first profit, it has been a long and successful journey after it was founded six years ago on principles of "The Three F's"; football, films and tacky "erotic drama". Its supporters say much of its success can be attributed to shedding the image as the sleaze station and taking on Channel 4 at its own game. Critics of Channel 4 say that the one-time favourite of the liberal and arts establishments has lost its way and, in the quest for ratings, plunged downmarket.

Channel 4, which was launched by Jeremy Isaacs in 1982 to be brave and thought-provoking, has become known as the platform for Big Brother and the crass humour of the game show Boys and Girls and the breakfast programme RI:SE.

Meanwhile the supposedly cheap and nasty Five - which changed its name from Channel Five last year - has found inventive ways to present arts and religious shows and has announced a season of primetime science programming.

Five is the only terrestrial channel increasing audience share. With a budget of £160m and 6.5 per cent audience share this year, it is attracting two-thirds of the viewers enjoyed by Channel 4 (£435m and 10.1 per cent of audience) with little more than a third of its spending power.

Yesterday the channel posted a profit of £1.05m for the six months to June, compared with a loss of about £3m in the same period the previous year, as advertisers were drawn to its increasingly young and more upmarket audience.

Chris Hayward, television analyst at Zenith Optimedia, said: "Five has done a bloody good job, considering its size and its programme budget. I think it's an extremely professional organisation."

At various points across the weekly schedule, Five is out-thinking its older rival. The success of its Saturday night American drama acquisition CSI is in stark contrast with Boys and Girls, which was commissioned from Chris Evans but scrapped in June after disastrous ratings.

In the mornings, Five cleverly attracts half a million children to watch the inexpensive Make Way for Noddy while Channel 4's terminally-ill RI:SE is watched by barely 300,000 people and is to be axed in spite of a costly re-launch.

In a recent report, the Independent Television Commission (ITC), a government watchdog, said: "Five was one of the success stories of 2002. Advertising revenues grew ... reflecting an improvement in both the quality and quantity of the channel's audiences. A marked shift in programming strategy saw Five emphasising a more mature, cleverly scheduled programme line-up." It noted that Five had achieved "widely recognised credibility as a significant and successful force in UK broadcasting".

Channel 4, the report said, had a problem. The broadcaster's task was "to define its identity and secure profitable space for itself between the mass-market popular appeal of ITV1 and the growth of a nimble and light-footed Five", said the ITC.

Channel 4 broke the mould of British television when it burst on to the air more than 20 years ago. The quiz show Countdown was famously its first programme but the schedule was a heady mix of original feature films, ground-breaking journalism (Channel 4 News), new humour (The Comic Strip) and music (The Tube), underpinned by a revolutionary soap (Brookside).

Brookside will be axed in November on its 21st birthday.

Mark Thompson, Channel 4's chief executive, said in April this year that the organisation had enjoyed "a year of progress" after turning a £28m annual loss into a profit of £16.5m. But the profits were achieved at a price. Mr Thompson introduced a job-cutting programme that will see staff numbers reduced by 25 per cent from 1,200 to 900.

He also acknowledged the need for the channel, which has become reliant on the ratings success of the reality show Big Brother, to refocus on the values it first espoused. "I think the purpose of Channel 4 is to do things first, to make trouble and to inspire change," he said.

Channel 4 continues to broadcast some high-quality original programming with recent successes including Jamie's Kitchen and reality formats such as Faking It and Wife Swap. It also enjoys a strong following on Friday nights, with American acquisitions such as Friends and Sex and the City.

But the channel's ability to be fleet of foot has been hindered by the diverse demands on its resources. Mr Thompson was forced to restructure the channel's film production unit, FilmFour Ltd, leading to the loss of 53 jobs and incurring exceptional costs of £11.2m. Channel 4 is also committed to the future of E4, its digital channel.

During the past two years, a succession of key executives have abandoned Channel 4's headquarters in Westminster and decamped to Five's trendy offices in Covent Garden. Most significantly Kevin Lygo was persuaded to become director of programmes at the newer channel, overseeing a change of culture that included a move upmarket and less reliance on evening movies, which were under threat from the increasing availability of multi-channel television.

Mr Lygo brought with him a clutch of Channel 4 talent that included Dan Chambers, Sue Murphy and Andrew Newman.

But Five was stunned two months ago, when Mr Thompson pulled off the coup of persuading Mr Lygo to return to Channel 4. It was a body-blow to Jane Lighting, Five's well-spoken chief executive, who was appointed in February.

Ms Lighting is committed to continue the channel's move upmarket and has promised an end to the late-night sleaze for which Five had become known.

In an attempt to prevent Mr Lygo taking his disciples back to Channel 4, she this week appointed Mr Chambers, 34, as Five's director of programmes, making him the youngest person in British television history to hold such a high-ranking position. Conor Dignam, editor of Broadcast magazine, said that Channel 4 was attempting to compete as a commercial organisation while having to fulfil commitments to public service broadcasting. "They are caught between a rock and a hard place," he said.

Nevertheless, a saviour is on the horizon in the shape of a slobbish, beer-swilling boor who even the newly-upmarket Five would love to get its hands on. Homer Simpson and family are expected to arrive on Channel 4 by Christmas.

Switching sides: The battle to win viewers

C4's Opening night, 2 November 1982: Statement of Intent

8.00: Brookside

Start of groundbreaking soap

8.30: The Paul Hogan Show

Early work from popular Australian star

9.00: Film on Four ­ Walter

Deliberately serious drama about a disabled child

10.15: The Comic Strip Presents

Innovative comedy. Launched careers of Rik Mayall, Adrian Edmondson, Dawn French and others

10.45: In The Pink

The kind of unclassifiable experimental revue that C4 would pioneer

C4, 12 August 2003: Tabloid Television

8.00: House Trapped

House professionals meet real people whose property dreams have turned into nightmares

9.00: That'll Teach 'Em

Modern-day kids put through the wringer in mocked-up 1950s school with scary teachers played by actors

10.00: Jamie's Kitchen

Repeat of Jamie Oliver's wannabe chef show as the cheeky chappy helps create culinary stars.

Five's opening night, 30 March 1997: Sex and violence

8.00PM: Hospital!

Comedy special set in a hospital. It failed to stand the test of time despite featuring the comedian Julian Clary

9.00PM: Beyond Fear

Recreation of the kidnapping of Stephanie Slater

10.30PM: The Jack Docherty Show

Late-night chat show which featured the channel's mascots, the Spice Girls,

11.10PM: Comedy Store Showcase for new "comics"

11.40PM: Turnstyle

Analysis of the weekend's sport ­ with Gail McKenna

Five, 12 August 2003: Art, History, Drama ­ and no nipples

7.30: The Story Of Art Deco

Mark Irving charts the rise of the 20th century's most chi-chi art movement

8.00: Black Hawk Down

Serious-minded corrective treatment by the Hollywood blockbuster industry of the disastrous US military foray into Somalia

9.00: CSI: Miami The dramatic world of the crime scene investigator recreated

How They Measure Up

Employees

Channel 4: 1,069

Five: 270

Factual Output (As percentage)

Channel 4:

1997 18%

2002 12%

Five:

1997 20%

2002 18%

Drama output (as percentage)

Channel 4:

1997 30%

2002 26%

Five:

1997 50%

2002 59%

Ad revenue 2002

Channel 4: £632m

Five: £237m

Complaints upheld by Broadcasting Standards Commission (2002-3)

Channel 4: 11%

Five: 4%

Complaints 2002 (total)

Channel 4: 925

Five: 217

Complaints 2002 (sex)

Channel 4: 19

Five: 8

Staff from ethnic minorities at board or senior level

Channel 4: 2.7%

Five 5%