This error message actually provides good information.
First, when using URL source in the custom channel settings, Channels DVR expects a link to a .m3u file. So you can't paste a raw stream URL directly. I should have known this. 
Sorry about this.
Second, Channels has detected that the stream is of type MPEG-TS.
Knowing this now, I think it should work if you do it this way:
Leave the XMLTV Guide Data section empty, it's not needed.
Here is the text that you can copy and paste directly:
#EXTM3U
#EXTINF:-1 channel-id="itv4hd" tvg-id="itv4hd" tvg-chno="1004" tvg-logo="https://tmsimg.fancybits.co/assets/s69375_ll_h15_ab.png?w=360&h=270" tvc-guide-stationid="69375" tvg-name="ITV4HD" group-title="HD",ITV4
http://192.168.0.16:8001/1:0:19:5159:842:2:11A0000:0:0:0:
Where it says tvg-chno="1004" make sure to change it to a channel number of your choice, as long as it's not a number that is already used by your HDHR.
After you set this up, Channels should start downloading guide data.
If the guide data doesn't look correct after you do this, tvc-guide-stationid="69375" will have to be changed. Let's see first if you can get something to work. 
I created a fake channel on my server using these exact settings and this is what it looks like in my guide:
Obviously, I can't play anything because the URL is local to your network.
You'll also notice that the times in my guide are 5 hours behind the official times. That's because I'm on the east coast of the USA so 5 hours behind GB time. 
