Return on innovation reflected in strong year for Channel 4

8 May 2014

• 2013 marks second year of Investing in Innovation strategy
• Viewer opinion of Channel 4 rises
• Strong creative year with 314 awards; more than ever before
• Advertising revenues stable at £846m
• Delivering on plan to breakeven in 2014

Channel 4’s Annual Report* for 2013, published today, reveals the not-for-profit broadcaster delivered revenue in excess of £900m (£908m) for the fourth successive year, enabling the second highest originated content spend in the broadcaster’s history (£429m).

The returns on this investment were led by a shift in viewer opinion of Channel 4 as significant uplifts were recorded in many remit reputational statements including ‘catering for audiences other channels don’t cater for’; ‘documentaries that present alternative views’ and ‘showing different cultures and opinions’.

2013 was the second year of Channel 4’s Investing in Innovation strategy, in which the broadcaster drew down on surplus reserves to fund additional investment in content and strategic projects. Total content spend was £597m and for the first time in its history Channel 4 sourced more than 50% of first-run commissions from outside London. Overall cash reserves at the end of 2013 stood at £238m (2012: £261m), with a planned deficit at £15m (2012: £27m). The organisation is on track to return to breakeven in 2014.

For the third consecutive year the Channel 4 sales house exceeded its target of £1bn and Channel 4’s total advertising and sponsorship revenues were marginally up year on year at £846m (2012: £844m). This reflects broad stability for the fourth successive year.

Total revenue was down slightly at £908m (2012: £925m), with continued growth in non-linear revenues, up 15% to £61m (2012: £53m). 4Rights operating profit fell slightly to £20m (2012: £23m) and a £36m operating loss in 4Broadcast reflects the cross-funding model Channel 4 operates (2012: £52m).

The data strategy continued to gather pace delivering 10m registered viewers two years ahead of target (2012: 6m), including half of all 16-24s; across 2013 29.5% of all VOD views came from logged-in registered viewers. VOD viewing grew 6% to 476m views (2012: 450m).

Commenting on the publication of the report Channel 4 Chairman, Lord Burns said:

“Channel 4 must consistently balance creative and commercial objectives; delivering to its remit whilst ensuring financial sustainability. I am encouraged that the performance outlined in this report demonstrates an organisation able to produce award-winning programming that has a significant impact on viewers and can stand on its own two feet. Along with Ofcom’s ten year public service licence from 2015, this provides long term stability for the organisation.”

Channel 4 Chief Executive, David Abraham, added:

“2013 was a year of creative highs on Channel 4; from Educating Yorkshire and Gogglebox to Toast of London and the award winning Channel 4 News. Our data strategy is advancing with over 10m viewers registered including one-in-two 16-24 year olds. As well as providing invaluable audience insight, this is enabling comprehensive demographic targeting on 4oD. With strong performance in our key audience demographics of 16-34 year olds and ABC1s, revenue is stable and we are on track to breakeven by the end of this year.

Reflecting the corporation’s track record for digital innovation, today we are announcing the biggest overhaul of our digital services since the launch of 4oD in 2006. Following the release of download functionality, 3G and 4G connectivity, and the full integration of short form content, we are now working on a significant overhaul of our digital estate to enable a much broader and increasingly personalised user experience. The refreshed service will roll-out across multiple platforms from late 2014 and across 2015.”

Further details of this significant upgrade will be announced later in the year.

Creative highlights across Channel 4’s network in 2013 included The Mill, Educating Yorkshire, Gogglebox, My Mad Fat Diary, Southcliffe, Syria Across the Lines, Ramadan Diaries, and for Film4 A Field in England, 12 Years a Slave, For Those in Peril and The Selfish Giant.

*Channel 4 Television Corporation Report and Financial Statements 2013. Incorporating the Statement of Media Content and Policy

 

The 2013 report is available here.

For images, click here.