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Report: Channel 4’s future sustainable

A report commissioned by UK public service broadcaster Channel 4 and produced by Ernst & Young (EY) examines the future of Channel 4 in a changing market environment. It finds Channel 4’s future to be sustainable, provided it retains the commercial and regulatory flexibility to respond to market developments and short-term change in the manner in which it has done so in the recent past.

The report, which was commissioned in light of current policy debates, finds that Channel 4 has adapted well to market change in recent years: successfully maintaining its portfolio viewing share through the process of digital switchover; maintaining robust revenue performances; and displaying innovation in launching and continuing to develop its on-demand proposition and investing in its data strategy – enabling it to monetise the growing amount of on-demand viewing.

Over the last five years, Channel 4 has undertaken a programme of investment in both commercial innovation and creative renewal. This has included launch of the award-winning data strategy which now has over 13.5 million viewers registered, the successful launch of new digital service All4, the introduction of targeted and programmatic advertising, and the launch of the Indie and Commercial Growth Funds.

Corporation revenues have been maintained at record levels and funded record levels of investment in original UK programming – with successful new returning series established such as Gogglebox, Humans, The Island, The Undateables and The Secret Life Of 4 Year Olds. In 2015 Channel 4’s main channel viewing share increased for the first time since 2006.

The report states: “Overall, Channel 4 has a track record of demonstrating flexibility and adaptability in the face of changing policy, consumption patterns, and economic conditions that impact on both short and mid-term profitability. This stands it in good stead to deal with future challenges – and we expect Channel 4 to remain sustainable as a standalone business, assuming it retains its current flexibility and ability to adapt.”

Launching the report, Channel 4 Chief Executive David Abraham commented: “This detailed report from Ernst & Young demonstrates that, thanks to a unique model and remit that encourages commercial and creative innovation, Channel 4 has successfully adapted to the changing marketplace over recent years and is sustainable as a standalone business for the future.”

EY raises a number of key considerations that it recommends to policy makers when reviewing the future of Channel 4 and its delivery of PSB:

  • The importance of Channel 4 maintaining a degree of discretion in how it fulfils its regulatory obligations.
  • Whilst the regulatory environment may need to evolve over the longer term, it should not require a wholesale shift away from the core Channel 4 remit.
  • As Channel 4 is part of a wider sector undergoing change, decisions about the future of Channel 4 should not be taken in isolation.
  • If the Government is considering privatisation of Channel 4, considerable thought should be given to the implications for remit delivery and potential for organisational uncertainty.

 

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