Big Brother used to give us all the cultural treasures — Nasty Nick, Nadia the transsexual and, of course, the late Jade Goody. But this time round, apart from a disturbing incident involving an evicted housemate, most of us haven’t a clue what any of the contestants are up to. OK, Britain’s teenagers may have a different take on that, but the average audience for the latest show, at 2.2 million, is easily the worst so far. It’s one million down on last time — nearly a third of the audience gone.

So bad is the performance that Channel 4 will have to promise advertisers some free airtime later this year to make up for the viewers it has failed to deliver. Not good for a programme that costs about £60 million a year (with Celebrity Big Brother thrown in). Outsiders in the know say it is now losing money, estimating the break-even level at about 2.5 million viewers, although Channel 4 insists this isn’t the case.

Nevertheless, the company has to face up to the difficult question of whether it should call time on Big Brother — a programme that was once innovative but has never really recovered from the Celebrity Big Brother race row. Worryingly, probably only a similar controversy would bring back big audiences — creating a headache that is not what Andy Duncan, Channel 4’s chief executive, needs right now.

Fortunately, in the absence of this show, there is an alternative reality TV spectacular at hand. This is Bloody Boardroom, where Channel 4 executives go and squabble. Or at least that’s the story being put round the media village. Start making phone calls on who will be the next chief executive of ITV, and within minutes talk turns to “how long has Andy Duncan got left?”

This is no drip, drip of rumour any more, but rather a torrent of conversation to rank with the “barbecue summer”. One thesis holds that Mr Duncan no longer has the full support of Luke Johnson, the outgoing chairman of Channel 4, or influential board member Tony Hall, the boss of the Royal Opera House. That leaves only Lord Puttnam, the film producer turned deputy chairman, to stick up for him. No doubt this is all exaggerated, but the constant speculation about Mr Duncan’s future is hardly conducive to his maintaining control of Channel 4, even if there are figures showing that in his five years as boss, its audience share, across all its channels, has grown from 10.5 to 12 per cent. And there has also been the odd Oscar for the likes of Slumdog Millionaire.

Yet there have been disasters too. Under Mr Duncan, Channel 4 has adopted a Big Brother plus begging bowl strategy. He talked of a “funding deficit” of £100 million a year, or maybe £150 million, implying that it needed a Royal Bank of Scotland-style bailout. It was disproportionate and unnecessary; Channel 4 has reacted to the downturn by cutting its spending on programmes, as ordinary broadcasters do.

Nevertheless, Mr Duncan succeeded in persuading ministers that Channel 4’s remit was to maintain “public service competition to the BBC”. This aspiration was the one that led to the disaster of Channel 4 radio — an idea that had to be abandoned after £10 million was spent on the dream of matching Radio 4. Even then it might have been viable if Channel 4 had got some cash from the BBC licence fee. But in fact, apart from a few warm words in last month’s Digital Britain White Paper, it got nothing other than encouragement to do a partnership deal with the BBC.

Hurrah, some cheered, while the rest of us waited for negotiations with the BBC to reach a conclusion. The talks have been running for only seven months, and each time the scope of the deal has been reduced. Now what might happen is that Channel 4 will handle sales for UK TV digital channels, half owned by the BBC’s commercial arm. It is not even clear if anybody can afford to buy out Virgin Media, the owner of the other half of UKTV, because the interest costs on any borrowing would cut into the synergies generated. And how much are they? Insiders say £25 million — not exactly the £100 million required to plug the funding deficit.

Five years on and Channel 4 remains essentially as Mr Duncan found it, with a few more digital channels. It is a small, quirky broadcaster, overly reliant on Big Brother, with no clear commercial strategy in an era when advertising income is collapsing. It helps to support British independent producers, but does not make enough “uncommercial” quality programmes to justify a subsidy.

So unless it turns out there is a brilliant deal with the BBC to be salvaged, it is worth the Channel 4 board asking the question of whether Mr Duncan’s strategy is leading anywhere. And at the very least it is worth stopping the Bloody Boardroom saga, which is proving as destructive as Big Brother’s sagging ratings.

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