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Today’s Channel Five

Channel 5, which now trades under Five as of 2002, was licensed by the Independent Television Commission on 27th October 1995 after a long battle between rival companies for the licence. It began in 1990 when the new Broadcasting Act required the Independent Television Commission to provide a fifth terrestrial television channel in the United Kingdom. They were also required to award the licence for Channel 5 on a competitive tender basis. In other words, the highest bidder won the prize. As a result the actual setup process for Channel 5 was long and arduous.

14th April 1992, the Independent Television Commission opened the bidding for the Channel 5 licence. From the start, Channel 5's big problem would be its transmitters. The British frequency plan simply catered comfortably for only four channels. It was the Independent Television Commission that tracked down the two UHF frequencies that would be available (channels 35 and 37) and should be able to provide at least 70% coverage around the United Kingdom. Initially, only one application was received by the Independent Television Commission for the licence. It was made by a network of city-TV stations planned by Thames Television. The Independent Television Commission chose to refuse it and it is alleged that the Independent Television Commission was thinking of not awarding the license at all.

Five on the other hand get their income from advertisers. This is far more unreliable, especially for a channel like Five. The issue is that, as John Bignell argues, the channel's coverage and audience share is significantly smaller. For advertisers a higher audience share would mean higher exposure for their company and therefore a better chance for higher revenue. Channels with a low audience share decrease the amount of exposure companies can get through using them and are therefore less appealing. This makes Five a high risk channel in some ways and yet in a heavily branded world can offer them a high revenue themselves provided they can maintain a high audience share.15 As of January 2007, Five's audience share is 4.7%, distinctly low given its new channels, which should increase exposure for advertisers.

As such, the annual budget for Five is very low compared with other channels. Its budget is approximately £110 million. In comparison with the other terrestrial commercial channels, ITV's is £800 million and Channel 4's is £280 million.17 As a result, the budget is primarily spent on the maintaining the production of current programmes. However, portions of it are also used to buy out the rights to old programmes in order to show the repeats, particularly from the US of late, and into new programming and documentaries in order to adhere to the regulations laid down by the Independent Television Commission when Channel 5 was first set up.

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