Channel 4's spend on original content reaches £434m high
Channel 4's annual financial report for 2012 has revealed that the not-for-profit broadcaster saw a third year of increased investment in innovation under the leadership of chief executive, David Abraham.
Spend on original content reached a historic high of £434m, with a total content spend of £608m, up 3 per cent on 2011, in order to bring shows such as Plane Crash, The Undateables and The Snowman and The Snowdog to air.
This continued investment in the schedule resulted in new titles accounting for 72 per cent of Channel 4’s top 50 most-viewed programmes in 2012.
£29m was deployed from the cash surplus of £78m built up in 2010 and 2011 for investment during the year, including Channel 4’s broadcast of the Paralympic Games, creative renewal, the launch of new channel 4Seven and the data strategy.
In August and September Channel 4 broadcast the London 2012 Paralympic Games, dedicating 252 hours across Channel 4, 4seven and More 4, as well as the 4oD video on demand platform. It included 193 hours of Games coverage, as well as 59 hours of analysis and documentary programming showcasing key disability sport. This achieved a 251 per cent increase in daily reach compared with viewing of the 2008 Beijing Paralympics.
£0.6m was spent finding and training disabled talent to present coverage of the Games and 64 per cent of viewers said they felt more positive towards disabled people as a result of watching Channel 4’s coverage of the Paralympics.
The report stated that: “Despite challenging TV advertising market and economic conditions, and the pressures of digital migration, the significant cash reserves accumulated over the past few years have enabled investment in a number of strategic initiatives. As a not-for-profit public service broadcaster, we believe it is right that cash reserves should be invested back into content and digital innovation rather than building up beyond levels necessary to keep the Corporation self-reliant”
The Channel 4 sales house exceeded its target of £1bn “in spite of a challenging market and a number of one –off televised events on competitor channels”. Meanwhile its total advertising and sponsorship revenues remained flat year on year at £844m, down £1m from £845m in 2011. Total revenue was also down at £925m from £941m in 2011.
Investment in video on demand platforms has extended the reach of 4oD resulting in increased registrations, views and revenue growth. By December 2012, 6.3 million viewers had registered with 4oD.
91 per cent of Channel 4’s revenue was derived from advertising and sponsorship in 2012, however revenues declined by £8m, driven mostly by decline in the TV ad market
4Broadcast, the broadcasting and supporting activities arm of the corporation, generated £833m in advertising and sponsorship, but was operating at a loss of £52m.
4Rights, the secondary rights business generating income through the distribution of programmes, sales of DVDs, and syndicated video-on-demand through third party platforms, increased its operating profits from £23m, up £1m from 2011.
Chief executive, David Abraham, commented on the report: “2012 was a memorable year for Channel 4 as we broadcast the Paralympic Games and invested more in UK content than in our 30-year history.
“Deploying part of our cash surplus, built up across 2010 and 2011, our strategy focused on investments in the organisation’s long-term future whilst ensuring that we maximised spend on UK content. We worked with more suppliers than ever before and broadcast a distinctive and diverse schedule, delivering to our remit on a daily basis.
“One in three of all 16-24 year olds in the UK are now registered with Channel 4 and our data strategy is evolving - eight new advertising products launched across 2012. We entered 2013 debt-free with cash reserves of £261m and will look to repeat this strategy of investing in innovation over the course of 2013.”
A full version of the report can be downloaded here.