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UK broadcaster Channel 4 fell to a loss of £52mn last year after suffering the worst fall in advertising since the financial crash and as it poured more investment in new TV productions.
Revenues at the group, which is publicly owned but commercially funded, dropped to about £1bn in 2023, from £1.1bn the year previously.
The broadcaster announced plans to cut jobs and costs earlier this year, focusing on teams in its linear TV business, as it shifts its business model to its digital offering. It said that the pressure on revenues meant the need for “material cost savings . . . unavoidably impacting on-screen spend as well as our operating cost base”.
Channel 4 finished the year with a pre-tax deficit of £52mn, from a surplus of £3mn in 2022. The broadcaster said there had been the “deepest market declines since the financial crisis of 2008-2009” in advertising in 2023.
Two-thirds of its revenues were spent on making TV — albeit a cut to £663mn from the record £712mn in 2022 — which led to a larger deficit that it had budgeted.
Channel 4 said there was a “more stable” advertising market in 2024, with a stronger first half boosted by the Olympics and other events but a “more challenging” second half owing to uncertainty around the Budget and consumer caution. Overall, Channel 4 predicts that advertising revenues will be “marginally up” in 2024. The broadcaster, which is run as not-for-profit, also has cash reserves of £96mn.
Pay for its top executives fell in 2023, with chief executive Alex Mahon seeing her overall remuneration drop by about a third to £993,000.
But both Mahon and chief operating officer Jonathan Allan received bonuses during a tough year for the group, while chief content officer Ian Katz declined to take his variable pay award. Mahon took a bonus of £247,000, while Allan’s bonus of £128,000 took his overall pay to £682,000.
In May 2023, executives chose to defer retention payments as part of a wider response to the difficult advertising marketing. Earlier this year the group’s remuneration committee recommended that this payment should be made “in due course, following consideration of signs that declines in the advertising market had started to stabilise in 2024 to date”.
Channel 4 has focused on digital growth as greater numbers of its views shift to streaming and social media platforms. Digital revenues increased a tenth to £280mn in 2023, accounting for just over a quarter of total revenues, and are forecast to reach 30 per cent in 2024, a year ahead of its targets.
YouTube videos have risen three fold as the broadcaster has moved more of its programmes to social media where younger audiences tend to watch TV.
Streaming makes up 15 per cent of viewing, and this digital audience grew by about a quarter in 2023.
Katz said that it would aim to launch fewer but bigger shows in future, while investing in content to drive streaming numbers.
He pointed to the success of titles such as The Piano and Russell Brand: In Plain Sight last year, while new and returning shows include To Catch a Copper, Married at First Sight, The Gathering and The Push.
Mahon said: “Our planned deficit and reduced cash were the intentional results of financing our transformation from linear to digital. During this transition, we need to keep buying the different formats and genres people like to watch on linear and streaming.”