The great Channel 4 switch-off

CHANNEL 4, for years seen as the hip station for young adults to watch, has suffered a dramatic slump in viewers among its key target audience, figures will show this week.

Provisional data for the first three weeks of the New Year suggest the number watching in the 16-to-34 age group tumbled 30%.

Details of viewing habits for the full month are yet to be released - and the broadcaster claims that it clawed back some of its audience as January drew to a close.

Channel 4 admits it had a 'horrific' start to the year and attracted fewer 16-to-34 viewers than 12 months earlier. But so did everyone, it claims. Channel 4's share of this diminished audience was down 'only slightly', it says.

The results of the viewing survey, compiled by the British Audience Research Bureau (BARB), are disputed. The new figures are the first to be based on results using a new selection panel of viewers who are meant to reflect more closely the age and mix of the population. The release of the information has been delayed while teething problems are sorted out.

But there is a growing acceptance that the figures are broadly correct.

And they appear to show that the money Channel 4 has spent on fashionable American programmes such as Friends, Ally McBeal, ER and Sex And The City - along with its nurturing of home-grown talent such as Graham Norton - is failing to prevent younger viewers turning off. The implications of the switch-off - whether it is real or merely reflects more accurate audience measurement by BARB - will be a headache for the station's new boss, Mark Thompson. He quit as the BBC's director of TV to join Channel 4 as chief executive and takes up the post next month.

Jim Marshall, chief executive of media-buying agency Mediavest, backs the view that the new BARB data gives a better picture than before. In other words, the old system overstated Channel 4's pullingpower with young adults.

He said: 'The feeling is that the old system was not picking up on new behaviour and the movement away from the more established channels towards new channels.'

About 40% of Channel 4's revenue comes from advertisers aiming at the young age group. If they do not think they are reaching the right market, they will go elsewhere.

Marshall said: 'These early figures look pretty devastating for Channel 4. They are putting on a brave face publicly, but there is a hell of a lot of concern privately. It was previously regarded as bombproof.'

Advertising air time is bought months in advance, so the full impact of any decline as a result of these figures will be felt not this year, but next.

David Elstein, former chief executive of Channel 5 and now an independent consultant, said: 'The station has always been able to charge a big premium because of its ability to deliver the 16-to-34 age group audience. It has built its whole advertising strategy on that. It looks as if Thompson's predecessor, Michael Jackson, did got out at the right time, but his successor has a job on his hands.'

Channel 4 has admitted it will report its first financial loss in almost a decade after advertising revenue last year fell by more than £35 million to about £600 million.

The decline has continued into the New Year. The drop in advertising revenue has already forced cuts of about three% in the 2002 programme budget.

Channel 4 may be forced to cut back on digital ventures such as FilmFour and entertainment channel E4.