Britain’s Channel 4 is booking revenues of $1.6 billion for 2023
British public broadcaster Channel 4 has announced revenues of £1.02 billion ($1.6 billion) for 2023, despite what is being billed as its worst advertising slump since 2008.
Channel 4 CEO Alex Mahon revealed the results as part of the broadcaster’s latest annual report, which was published later than usual due to the general election earlier this summer.
Despite this, the network is running at a planned deficit of £52 million, which it warned about earlier this year when Mahon also announced in January that the company would cut 18% of its workforce and a number of underperforming linear channels. an effort to reduce operating costs by 2030. The broadcaster also expects a financial deficit next year, albeit smaller.
The annual report says the deficit has enabled the publicly owned and commercially funded broadcaster to continue investing in content (£520m by 2023) and its ‘digital-first future’, while it focuses on its streaming platform.
While the TV production industry has clung to the mantra of ‘survive to ’25’ to get through a second year of the commissioning slump, Channel 4 said it had ‘prioritized’ investing in content in 2023 , with an expenditure of £663. million (65% of sales), of which £520 million was spent on original content. In 2023, the competition series ‘The Piano’ was said to be the top show of the year, and the highest-rated new format in six years with an audience of 8.8 million viewers. This year it devoted significant resources to the Paralympic Games in Paris, which attracted 20 million people.
In a sign of its investments in digital, revenues there rose 10% to £280 million, accounting for 27% of total revenues (in 2022, digital was 22% of total revenues). By 2024, these are expected to reach over £300 million, meaning Channel 4 will reach its target of 30% of total revenue from digital a year ahead of schedule. The company also said streaming minutes increased by 23%, while non-advertising revenue reached £101 million.
“2023 was another year of strong strategic progress as we grew the size of our digital business, delivering market-leading digital revenue diversification and record streaming,” said Mahon. “Our planned deficit and reduced cash flow were the intentional results of financing our transformation from linear to digital. During this transition, we must continue to purchase the different formats and genres that people enjoy watching online and through streaming. As a result of our investment in this transformation, we are already seeing the benefits of prioritizing spend on content and digital innovation.”
“In 2024 we have set out the next phase of Channel 4’s growth with a robust and ambitious strategy for the future and have seen a stabilization of the advertising market. We are also at the point where digital viewing is overtaking linearly across the market. By committing even further to our digital transformation with our Fast Forward strategy, we are keeping Channel 4 ahead and protecting its ability to continue to deliver trusted and distinctive content to the British public.”
The annual report comes at a time of continued turmoil for the UK TV industry due to economic instability caused by the advertising slump, inflation and deep-pocketed streamers chasing eyeballs and talent.
As well as the plan to make around 200 of its 1,200 staff redundant, Channel 4 also plans to sell its central London headquarters and merge several commission and content teams such as drama and film.
Channel 4 spent much of 2023 fighting Conservative plans to privatize the company. Ultimately, it was decided that it would remain government-owned, but for the first time in its 40-year history, would be allowed to produce its own content rather than outsourcing it to independent production companies. British producers’ organization PACT has expressed concern about the change, warning it could further damage Britain’s already precarious manufacturing industry.
