C4 delivers “great results in challenging market”
June 12, 2019
Channel 4, the UK FTA broadcaster, delivered what it declared “a strong commercial performance” in 2018, driven by record growth in digital – as Channel 4 Chief Executive Alex Mahon outlined major new developments to build on the strategy she announced in May 2018 to accelerate digital and supercharge youth – with a new Terms of Trade deal and investment in a new digital teens strand for YouTube and social media.
Despite difficult market conditions and ongoing economic uncertainty, Channel 4 delivered corporation revenues of £975 million – an increase of +£15 million on 2017. This enabled the corporation to deliver a surplus of £5 million following two years of planned deficits in which it drew on its reserves to invest in content.
As a result, Channel 4 maintains a strong balance sheet, with total net assets of £439 million (2017 £446m) alongside cash reserves of £180 million (2017 £190m).
Some £662 million was invested in content – the third highest investment in Channel 4’s history – and within that, the amount spent on the main Channel 4 increased to £548 million, up £4 million on 2017. This enabled investment in innovative new shows across a range of genres.
Derry Girls launched as Channel 4’s most successful new comedy since 2004 – and was the biggest series on record in Northern Ireland since records began. A number of new formats and programmes were launched, such as The Big Narstie Show, Genderquake, Peng Life, Stath lets Flats, Prison and The Circle, which delivered a 49 per cent profile of all 16-34s viewers across the series – the largest on any terrestrial channel since 2012.
These new shows were complemented by investment in hit returning shows, 16 of which grew their audience in 2018, including Gogglebox, 24 Hours in Police Custody, Grand Designs, The Island with Bear Grylls, Hunted and 8 Out of 10 Cats. As a result, Channel 4’s main channel share was maintained level at 5.9 per cent across the year. Competition in the digital market, EPG changes on some platforms, and the impact of the World Cup broadcast on BBC and ITV did impact overall portfolio viewing share which declined -0.3 percentage points to 10.2 per cent share over 2018.
2018 saw a record performance in digital viewing on All 4, with growth of +26 per cent – the highest rate of since 2010 – to reach a record 915 million views over the year. All 4’s success reflects the increased demand for catch up programming from the channel portfolio’s strong linear schedule, and the success of its large archive and exclusive box set content – which now includes partnerships with Vice, Adult Swim, Sky and Walter Presents. The success in growing digital viewing on All 4 resulted in record digital revenues of £138 million. These were up by +11 per cent year on year and now make up 14 per cent of total corporation revenues.
2018 was also a strong year for Film4. Three Billboards Outside Ebbing, Missouri was the first film to result from a new strategy of taking larger stakes in certain key titles – and it was a huge critical, awards and box office success. A joint partnership with Fox Searchlight, it booked more than $160 million worldwide and won two Oscars and five BAFTAs. Other standout films including Pawel Pawlikowski’s Cold War, Steve McQueen’s Widows, and Yorgos Lanthimos’s The Favourite all achieved critical and awards success.
The 4 All the UK strategy, announced last year, is being delivered as planned following the tender process carried out in 2018. The decision to locate the new National HQ in Leeds and Creative Hubs in Bristol and Glasgow as announced in October 2018 is on-target with staff starting to move in from the autumn of 2019. The strategy will enable new stories, ideas and talent from across the UK to be seen and will generate jobs and growth in the creative economy outside of London.
Channel 4 Chair, Charles Gurassa, said: “2018 was a year of strong performance for Channel 4 both creatively and commercially. Against the background of a changing media landscape and a challenging economy, Channel 4 continues to be seen as a compelling brand to viewers, advertisers, producers and talent. Our digital viewing and revenues enjoyed another year of rapid growth and Channel 4 delivered high levels of public service impact. I’m pleased that the corporation delivered a £5 million surplus and, with a strong balance sheet, remains in robust financial health – well prepared to navigate any Brexit-related volatility in the advertising market over the coming months.”
Mahon added: “Despite a challenging market, Channel 4 delivered great results in 2018, with growth in our revenues and digital playing a more important role than ever. Most importantly we continued to make an impact with innovative, purposeful and popular television, film and journalism. It’s a phenomenally exciting time to be at Channel 4 as we transform the organisation to be truly representative of the whole country with the 4 All the UK strategy and continue to accelerate our digital growth and increase investment in our relationship with young viewers.”