Channel 4 record spend on UK content

14 May 2013

• Record investment in UK content of £434m (2011: £419m)
• Historic audience records set at BAFTA and RTS award winning Paralympic Games
• 10% draw down from cash reserves, which now stand at £261m
• £1bn C4 Sales House revenue, C4 advertising revenue flat at £844m (2011: £845m)
• Share of TV viewing stable at 11.5%

Channel 4’s Annual Report* for 2012, published today, reveals the not-for-profit broadcaster enjoyed a third year of increased investment in innovation under the leadership of Chief Executive, David Abraham.

Spend on originated content reached a historic high of £434m, with a total content spend of £608m, up 3% on 2011. This continued investment in the schedule resulted in new titles accounting for 72% of Channel 4’s top 50 most-viewed programmes in 2012. Creative renewal also impacted on audience perceptions with the Channel 4 brand strengthening across key measures including risk taking, challenging prejudice and being experimental.

£29m was deployed from the cash surplus of £78m built up in 2010 and 2011 for investment during the year. This constitutes 10% of the total reserves at the start of 2012 (£290m). These funds were used to invest in a range of innovations including Channel 4’s broadcast of the Paralympic Games, creative renewal, the launch of new channel 4Seven and the data strategy. Cash reserves at the end of 2012 stood at £261m (2011: £290m), well ahead of the target level of £200m, with a planned deficit of £27m (2011 surplus: £35m).

For the second consecutive year Channel 4 sales house exceeded its target of £1bn and Channel 4’s total advertising and sponsorship revenues were flat year on year at £844m (2011: £845m). Total revenue was down slightly at £925m (2011: £941m), with an impressive 50% growth in non-linear revenues, up to £36m (2011: £24m). 4Rights operating profits increased to £23m (2011: £22m) and a £52m operating loss in 4Broadcast reflects the cross-funding model Channel 4 operates.

Commenting on the publication of the report Channel 4 Chairman, Lord Burns, said: “Channel 4 exists to deliver to its remit and did so in abundance across 2012, entering 2013 in a strong position both creatively and financially. The success of the Paralympics demonstrated the organisation at its very best and I am encouraged by the overall renewal of the schedule and the stability of the portfolio’s share of audience. Knowing that we aim to operate the business to break-even over the long term, the Board is comfortable with the planned deficit for 2012 and the strategy of continuing to deploy our cash surplus during 2013 to further invest in innovation. This is to the benefit of our audiences and creative partners.”

Chief Executive, David Abraham, added: “2012 was a memorable year for Channel 4 as we broadcast the Paralympic Games and invested more in UK content than in our 30-year history. Deploying part of our cash surplus, built up across 2010 and 2011, our strategy focused on investments in the organisation’s long-term future whilst ensuring that we maximised spend on UK content. We worked with more suppliers than ever before and broadcast a distinctive and diverse schedule, delivering to our remit on a daily basis. One in three of all 16-24 year olds in the UK are now registered with Channel 4 and our data strategy is evolving - eight new advertising products launched across 2012. We entered 2013 debt-free with cash reserves of £261m and will look to repeat this strategy of investing in innovation over the course of 2013.”

Channel 4 worked with 460 suppliers across 2012, a 6% increase on 2011. Investment in content outside of England was up 37% on 2011 at £21m and £18m was spent on feature film production and development, with highlights including The Iron Lady and The Imposter.

More than two thirds of the UK population watched the BAFTA and RTS award-winning Paralympic Games on Channel 4, a 251% increase in daily reach compared with viewing of the 2008 Beijing Paralympics. £0.6m was spent finding and training disabled talent to present coverage of the Games and 64% of viewers said they felt more positive towards disabled people as a result of watching Channel 4’s coverage of the Paralympics.

The Channel 4 portfolio ended the year at 11.5%, down just 0.1% on 2011 (11.6%). 4OD is now available on Xbox and YouView and continued to grow across 2012, with total views up 5% to 450m (2011: 429m).

Creative highlights across Channel 4’s network in 2012 include Stand Up to Cancer, The Snowman and the Snowdog, 4 Goes Mad, The Midnight Beast, Funny Fortnight, Bank of Dave, The Fear, Derek and In The Best Possible Taste - Grayson Perry. Returning series included 24 Hours in A&E and The Undateables.

Channel 4 News won six RTS News Awards including Daily News Programme of the Year, National Presenter of the Year and Television Journalist of the Year.

 

The 2012 report is available at:        http://annualreport.channel4.com/

 

*Annual Report includes the Report and Financial Statements and Statement of Media Content and Policy