Alex Mahon keynote to Enders Analysis Conference

10 March 2021

DIGITAL TRANSFORMATION PLAYBOOK: LESSONS LEARNED

Good morning everyone.

As you might expect, Channel 4 is on a journey of digital transformation

We have the youngest audience of any public network in the world. That means we are impacted by changing consumer behaviours faster than both our competitors and anyone globally.

All broadcasters face a decision about how fast to shift their traditional businesses to digital streaming. We are in a crowded and competitive market that only grows.

Astonishingly every year consumers watch more video per day. They are watching more long form and the growth is in viewing on big sets not small screens.

This pivot into digital is three ways for us.

• Pivoting from linear to streaming viewing
• Pivoting from analogue to digital advertising
• Pivoting our distribution from broadcast to digital

In 2020 we accelerated despite the pandemic.

All 4 very clearly became the UK’s biggest free streaming service.

We had record growth in streaming last year at over 30% and 2021 is starting even bigger - up +130% so far.

And crucially, our digital revenues are further ahead as advertisers find our product – a trusted brand and high-quality video with legitimate measurement – very attractive.

Today I wanted to share with you some of the things which have helped us so far.

WORK OUT WHAT CONSUMERS WANT

First we had to develop the right mindset – we had to become more curious, and want to understand what was going on in the outside world.

And that meant we had to start off with being realistic about what had changed.

Consumer expectations have really ramped up in the last decade.

They expect you to know more than just what they watch so that you can create a whole user experience for them – from content, to product, to marketing.

They expect you to have perfect data – but also not do anything creepy with it.

THEN ACT ON THE INSIGHT

When we got into the right mindset, we actually had to act.

The insight we got enabled us to put viewers at the heart of all our decision making – in picking our shows, in scheduling, in marketing and in product.

Let me give you some examples:

We know PSBs are different to SVODs – research we did last year showed that viewers see us as being more responsive to their experiences and lives – helping them view our UK world from the inside, taking the familiar and sharing it through a new lens.  As opposed to the SVODs who are looking from the outside-in, often with people we enjoy watching but we can’t relate to.

This insight served us well in lockdown: we responded to what our audience was experiencing during the pandemic and we met their changing needs with content which spoke to what we were all going through.

Programmes like Grayson’s Art Club, Jamie Oliver cooking whilst trapped at home, and the Gogglebox families – and escapist entertainment like Bake Off and Friday Night Dinner. These all reflected what viewers wanted. We all needed Entertainment and Distraction as well as a knowledge that other people were in their homes going through the same thing as us.

And in lockdown #3 - Cricket, Great Pottery Throwdown, Devon and Cornwall – are warm baths of joy to help keep the nation going.

The other insight that had huge impact 4 years ago was that the Brexit result represented a divide in Britain, that many felt disconnected from the perspective the National Broadcasters were seen to represent.

So we moved many of our jobs out of London - because we felt this was the demand of consumers.  We are now well on the way to spending 50% of our funds out of London, we are investing in companies across the UK, we have our National HQ in Leeds and we will be co-hosting News from there later this year.

PEOPLE WANT BRANDS WITH PURPOSE

Research shows purposeful organisations perform better. They make more money, they have more engaged employees and more customers – and they are better at innovation and transformational change.

Our 2021 research shows that more than half the population have become more engaged with social issues as a result of the pandemic.

And – for now – the pandemic has increased that quest for purpose.  54% agree that brands have a duty to be a force for good in the world – and 61% think brands should stand for something.

At Channel 4 we have a really clear purpose – to Create Change Through Entertainment – and a very strong brand, particularly with young and diverse audiences.

Being relevant and resonant for our UK audience ensures we are a strong, distinctive and consistent brand – and it’s what sets us apart from our competitors.

The most recent example of where this helps our business is a show called It’s A Sin which finished last month.

We were challenging convention with a show that no one thought could work – about AIDS and the last pandemic - whilst in the grip of the COVID pandemic.

The viewing of it was spectacular and the show is utterly brilliant.

The thing I am most proud of is the impact in the real world on HIV testing numbers which have doubled as a result of the show.

After watching It’s a Sin, Norman Fowler, the Speaker in the House of Lords who was the minister responsible for the public health campaign ‘Don’t Die Of Ignorance’ in 1987, decided to quit as Speaker so that he can devote his parliamentary activity to campaigning on HIV/AIDS.

TRUST IS PARAMOUNT

Consumers need to trust your brand, they need to see it as authentic, and they will sniff out any gaps fast.  

Channel 4 challenges misinformation and for consumers is seen as a beacon of trust and. In Ofcom tracking we are regularly rated as the most trusted UK national news source.

But the reality is it’s very hard to maintain this and one has to change how things are done in the organisation frequently.

Our News has had record audiences since COVID started. But in order to maintain that trust we insisted on applying the same standards to our social and digital activity that we do to our on screen Ofcom regulated news.

We know that young audiences want trusted facts and information and they know they cannot get that from social media providers . Only 35% of people think social media is trustworthy and that is dropping – only 36% of people think it’s accurate, by comparison those numbers are 71% and 72% for what we do. 

YOU NEED TO BUILD UP THE SKILLS BASE

As we transform our business, we’ve had to be realistic about the skills shortage inside our organisation, and we’ve embraced the opportunity to recruit from outside of London.

We did this partly for selfish reasons – we found brilliant people away from London, and in some ways, recruitment was easier for us away from the digital tech giants.

We established 4Studio in Yorkshire, our own studio managing our marketing on digital and creating short form content too. Our team is full of established social experts from a mix of digital-first publishers like LADBible, Jungle Creations, DAZN and Little Dot Studios. This is a huge team of talent – most of whom are yet to meet or even set foot in a Channel 4 office.

We’ve significantly invested in our All 4 Product, UI and UX following our reality check about how consumers really felt about All 4 – and now the All 4 experience is the best it has ever been.  

LEARN WHERE TO FISH

Before we started this journey, we were marketing all our content across our own channels. Although this gave us loads of exposure and was cheap, we realised we were only promoting our shows to a closed and ultimately declining universe.  

We were also focusing our marketing on WHEN to watch, which was the opposite of how consumers actually behave – consumers want to know WHAT to watch and THEY CHOOSE WHEN for themselves

We’ve worked really hard to get our content to where young people spend their time – and it has paid off.

Last year we were the first UK broadcaster to agree a deal with Snap to publish on their platform which has given us huge exposure. This was so important to us as Snap reaches over 90% of 13-24 year olds in the UK.  

I think perhaps the most impressive demonstration for us of where all of these lessons come together to make a transformational impact is in the news.

Channel 4 News is proportionally the youngest profiling news of the UK mainstream channels.

As I said earlier, we knew for young people hearing about TV shows on social remains a key driver of viewing.

The Channel 4 News team now posts over 100 bespoke videos per week across Facebook, Snap, Insta and YouTube as well as our daily live sixty minute show.

For Youngs, the long form News had an 80% volume rise in lockdown and is up again this year.

But I think the dramatic stat is that of the young audience, 27% have recently started watching the long form Channel 4 News after discovering Channel 4 News on social. This is an incredible validation of this approach and proof of my view that young people care about the truth – we just need to work on finding them!

SET TARGETS

SHIFT INVESTMENT TO MATCH THE STRATEGY

We have set ourselves hard targets for the next five years. We will double streaming viewing to All 4 – and digital advertising will make up at least 30% of our total revenue and non-advertising will be at least 10%.

Our Future4 strategy is very clearly about prioritising digital but I must admit it is hard to challenge and change all our established behaviours and to shift our ways of operating and to move from comfort to growth and experimentation.  

KEEP THE UK THE BEST AT THIS

As the Public Service Broadcaster with the youngest audience in the world, as I hope I’ve shown today, we’re moving fast into digital Public Service Media.

This transformation will underpin the delivery of our remit and public purpose and, as we emerge from this pandemic, will ensure that we can continue to drive the creative economy in the UK.

In 2019, the creative industries had twice the growth rate of the rest of the economy in terms of jobs.

As a digital first business, our investment in content and technology is creating new jobs for young people across the UK – and helping give new opportunities for skills and training in our sector.

We will also continue to ensure we are serving that young audience with regulated, trusted and fact checked content.

As we know, the impact digital harms are having on young people is well documented and increasing as they spend more time on social platforms – and as yet our regulatory framework has not kept pace with this.

I know that legislation always tends to lag reality a little but now, as we emerge from this hideousness, it is time to act as a government and an industry.  

It’s more important than ever that we have an updated framework to support us in this digital environment so young people are protected from digital harms and so that they are able to easily find the high quality public service content which we know they enjoy, and most importantly, that they know they can trust.

Thank you very much.