C4 delivers creative renewal, innovations and financial sustainability

9 June 2015

• Channel 4 revenue up +£30m to £938m
• Three-year strategy delivers planned return to break even
• UK original content investment maintained at £430m (2013: £429m)
• Significant creative awards won: Channel of the Year, 3 Oscars, 8 TV BAFTAs
• Highest ever share of 16-34 viewers across portfolio with 17% (2013: 16.7%)

Channel 4’s 2014 Annual Report, published today, outlines the success of the corporation’s Investing in Innovation strategy which has resulted in a year of national and global creative success, business stability and enabled the launch of major innovations to support future sustainability.

The three-year strategy saw Channel 4 draw down on its reserves to fund a creative overhaul of the schedule – as well as strategic business innovations. UK original content spend of around £430m was maintained over three-years (2012-2014) and a new spine of returning series established such as Gogglebox, Educating… ,The Island, The Jump and The Undateables. This creative renewal was reflected in the range and scale of awards success in 2014 which included Channel of the Year, three Oscars, and more BAFTA and Royal Television Society programme awards than any other UK channel.

Viewing share in peak-time and for 16-34s increased across the Channel 4 portfolio in 2014, in contrast to declines in these metrics for other main commercial portfolios.

Channel 4 met its planned three-year investment and break even business targets, reporting an overall financial surplus of £3m, with cash reserves remaining above £220m for the fifth year in a row. At both a corporation and sales house level there was strong growth in revenues across 2014, with overall Channel 4 revenues up +£30m to £938m. Within this, despite the impact of the World Cup, total Channel 4 advertising and sponsorship revenues were up +£23m to £869m. Overall Channel 4 sales house revenues exceeded £1bn for the fourth successive year.

Commenting on the launch of the 2014 Annual Report, Channel 4 Chairman, Lord Burns said:

“As a not-for-profit organisation, Channel 4 plays a unique role as both a creative greenhouse for the UK and a major contributor to the creative economy. I’m very pleased that the award winning creative output and commercial innovation we have outlined in the annual report demonstrate that Channel 4 is strongly delivering to its public service remit and is well positioned financially for a sustainable future.”

Channel 4 Chief Executive, David Abraham said:

“In 2014 our three-year Investing in Innovation strategy bore fruit, with creative renewal now flourishing across multiple genres and the significant number of major creative awards won testament to the quality and impact of our programmes and film. Strong growth in revenues has enabled us to meet our break-even target and we have been able to launch a number of innovations to support the future sustainability of Channel 4’s not-for-profit model.

“Both culturally and financially Channel 4 continues to punch above its weight and make a huge contribution to the creative sector at no cost to the UK taxpayer.”

The success of Channel 4’s award-winning data strategy – with 11.3m viewers registered at the end of 2014, including half of all 1634s in the UK – helped to drive growth of +13% in digital advertising revenues. Driven by strong growth in VOD viewing of +23% to 587m views (2013: 476m), overall online revenues grew to £63m (2013: £61m) – and are forecast to rise to £100m by 2018.

The stability of the business enabled Channel 4 to launch the £20m Growth Fund, which extends the corporation’s commitment to the creative sector by investing minority stakes in growing small and medium sized production companies. Minority stakes were taken in Arrow, Eleven Films, Lightbox, Popkorn and True North, with £4.9m of the fund committed over 2014.

Channel 4 continued to make a significant contribution to public value through its unique social enterprise model – working with 338 creative partners across the year, of which 29 were new to the broadcaster. For only the second time since 2008 over half of all first-run originations were sourced from suppliers outside of London. In total, over £10bn has now been spent by Channel 4 since its launch in 1982, over £8bn of which was with UK producers.

Across a range of reputational impact measures linked to its public service remit, Channel 4 continued to outperform the other main PSB channels – and also continued to broadcast more long-form news and current affairs programming than any other PSB channel.

The 2014 report is available here.

ENDS