A tale of two broadcasters - how Channel 4 balances fact with feel as it leans into data to power digital transformation

Profile picture for user slauchlan By Stuart Lauchlan April 21, 2021
Summary:
Don't waste a crisis! As COVID struck, Channel 4's digital focus accelerated to great success, says the broadcaster's CEO Alex Mahon.

Channel 4

With the world in lockdown for large parts of the past year, there has never been a greater need for content to keep people informed and entertained.

Fortunately there’s also never been so much content on offer as traditional broadcasting companies have increased their digital presence across multiple platforms, while the rise of global streaming services from the likes of Netflix, Amazon and Disney has redrawn the media landscape.

For the more traditional breed of broadcasters, disruption and transformation have been a norm for many years. The UK’s Channel 4 is good case in point. Set up in 1982 as public service broadcaster with a remit to produce “distinctive programming”, the channel is free-to-air and largely self-funded by advertising. It also has its own digital steaming service in the shape of All4, which launched in 2006 (then called 4oD).

When it launched, the channel was itself viewed as a disruptor, with its programming often seen as controversial when compared to the output from its more mainstream BBC or ITV elders. Now approaching its 40th birthday, Channel 4 can still cause a stir - it attracted criticism from some quarters for its decision not to transmit wall-to-wall coverage of the Duke of Edinburgh’s death, for example. 

But as it enters ‘middle age’ the channel is still about change, argues CEO Alex Mahon, and that’s never easy to manage:

Change is always hard. People say they want change, but when you then say, 'Here's the change', only about ten percent of people are jumping up and down with excitement; about 80% of people are going, 'Oh, change, oh...'. That's the reality of making change in organizations, but as people start to see success, they get very excited.

Data takes on the digital giants

For Channel 4, the growth of digital platforms and the resultant impact on consumer behavior have been critical factors when planning strategy and that has demanded a focus on data and insights, says Mahon, starting with being really clear about what audiences want and where and in what form they want to consume it:

Consumers watch a lot of content a day - they watch about 150 minutes of television a day in the UK and about 120 minutes a day of more video, whether that's on streaming services like ours or on Netflix or on Facebook or on Instagram. So there's a huge amount of content watched by consumers. But we have to be honest with ourselves that they want to watch the content wherever they want, when they want, on the device they want and ideally they don't want to pay for it.

Once we really thought that through, we put that at the heart of our strategy. How do we accelerate our streaming business and how do we ensure that we go as far as we possibly can to service what consumers want? It was a combination of honesty and then thinking through how our strategy needed to change to act on that insight.

For an established broadcaster like Channel 4, there’s a twin challenge right now - evolving traditional established practices, while competing with digital start-ups who don’t come with the ‘baggage’ that older firms inevitably have to manage. It’s crucial to experiment, urges Mahon, and to be honest about that experimentation in practice:

As we do experiments, some of them will fail, but let's do experiments, so we can learn. That's the hardest thing to get right in a traditional company, because it's just not the way they run.

Being ready to undertake honest post-mortems of failures is a key element here, she adds:

Everyone loves to celebrate when it works; people hate to do post-mortems because in traditional companies, post-mortem-ing means someone's going to get fired...I'm a scientist so I'm used to [the idea that] you learn from failure, but you have to demonstrate that a lot. You also have to talk about your failures, but what you learned from them.

Fact vs feel

Working in a creative industry, the important thing is to strike a balance between hard fact and gut feel, she suggests:

With creative things, it's always a mix of data and hypotheses and opinions and insight. So you're always saying, 'I think this is how people feel', often served by qualitative data and research [into] how consumers are feeling, what are they responding to, how do they feel about public service broadcasters? It's that kind of data - qualitative - that will give you a kind of theory or hypothesis, which you will then prove out by measuring with quantitative data. In our business, it's always a mix of those things.

This can be seen in practice in how Channel 4 put together its cross-platform promotional strategy for a digital age. Mahon explains:

We have deals in place with Facebook, with YouTube, with Instagram, with Snap and we've just signed a deal with TikTok. We promote all our shows there and we track all of that through data. What we see is, what's the young engagement with those brands? How can we push the marketing of our shows differently on each of those platforms, so that then people come to our platform to watch the whole pieces of content? That data brings us increased brand awareness, increased brand attribution - so that people know those shows and that content is coming from us at Channel 4 -  and then it leads over time to increased actual viewing of the long form shows. We can then see the uplift in terms of how we've marketed those shows and what the total viewing is they get. So data is absolutely key to us being able to do that, to proving that our marketing approach actually works.

The COVID crisis inevitably accelerated the broadcaster’s digital focus, Mahon notes:

We put more stuff on demand, we pushed harder on that. People were at home, but we improved our share against competition so it wasn't just that people were there. What we also did was, we were more reactive. We were much faster at making programming decisions. So, if you were trapped at home, like all of us, watching Channel 4, within a week-and-a-half of lockdown, we had Jamie Oliver on screens very night at tea time, cooking from home. We had lots of news and documentaries about how not to catch the virus, how to clean your house, what were the death rates etc. We made this set of shows, which were really about kind of bringing the nation together. Although we couldn't be together, we were watching the same thing in our own homes separately and that was really popular with the audience because it spoke to who we were as Britain at the time.

The digital uptick has been assisted by the firm’s earlier decision to place a lot of functional roles outside of London, to locations such as Glasgow, Bristol and Leeds. This has proved a savvy move, says Mahon:

In Leeds we could recruit quicker, because we're not competing with some of the digital giants. We can get great digital talent there. We're a top employer there. So that helped us accelerate, where we've got a big digital studio, because we could recruit fast. 

That bringing on of fresh talent is vital, she adds:

You can't do everything unless you have the skills from outside and the skills of people who are experienced. So, it's been a real kind of blended team. In today's world, you have to keep bringing in skills from outside or looking to other companies to learn from them, because the business climate is changing really really fast.

As lockdowns lift and the Vaccine Economy takes shape, Mahon has her own view on what comes next:

I'm hoping that we see unmitigated joy after unmitigated drudgery. People will want to celebrate and have fun in their lives. I hope that we'll go into a tremendous period of growth and excitement. Companies will increase the agility and the speed of our business cycle. Lots of companies will go to the wall unfortunately, but change will be demanded by consumers and the expectation on us to do that will be there.

But equally many of us have used this crisis well. We've got faster at doing things, we’ve communicated better as management teams, we've worked out we can work differently. But I think you have to start with, what will serve your business best? For us, that's understanding the consumer and then what do we do with that insight? For each of us that's the question -  how do we service what our customers want, because I think their demands and requirements only go up.

 

Netflix meanwhile has encountered its own COVID challenges as outlined in this complementary article.