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How Channel 4 navigated 2020: ‘We will emerge from this crisis stronger than ever’

Channel 4 will ‘emerge from this crisis stronger than ever,’ says its chief exec.

Channel 4’s Annual Report for 2019 has claimed that it is in a “robust financial position ahead of expectations“ after a rough few months in the immediacy of the UK national lockdown. “We will emerge from this crisis stronger than ever,“ wrote chief executive Alex Mahon.

The UK public-service broadcaster faced deep cuts, production backlog and furloughed 10% of its staff, but looks set for a full recovery in the coming year.

Here’s what you need to know from the report.

Highlights

  • All furloughed staff have returned to work. 10% of its workforce was on furlough.

  • It will repay the government around £1.5m in furlough. Mahon said it was too hasty in using the scheme.

  • Some investment has been deferred to 2021 as the broadcaster held onto its cash.

  • In April, it pushed through a £150m reduction in its content budget and a further £95m cost savings.

  • “A better-than-forecast return of the advertising market“ is credited for the recovery.

  • The TV advertising market contracted by 3% in 2019. It blamed an economic slowdown and Brexit – and this is before the pandemic bit into linear revenues – down nearly 50% year-on-year in April and May.

  • Total revenues increased by £10m to £985m in 2019 as the company diversified to reduce its reliance on TV spots. It has since built out its social media advertising capabilities where it will combat digital publishers like LadBible for budget.

Consumption

  • VOD views were up by 9% in 2019. Digital revenues rose 18% to £163m. It had 995m programme views on-demand.

  • TV viewing share decreased by 0.3% to 9.9%. All 4 was credited for slowing this decline.

  • All 4 viewer reach increased by 10%. Total views were up by 9%. It claims that 80% of 16-34-year-olds in the UK are now registered on the platform. That was 70% in 2018). It had 22.2m registered users on All 4.

  • Leaving Neverland, Celebs Go Dating, The Great British Bake Off, Gogglebox and Derry Girls helped drive this traffic.

  • It noted a shift worth keeping an eye on. “For the first time, one of our shows performed better on All 4 than on linear television”. The show in question was series two of cult favourite The End of the F***ing World. 55% of views were streamed.

  • Its youth audience grew slightly during peak times (and top shows). It claims to be the only commercial public service to do so.

  • It also reported its highest ever BAME profile – at 7.9% on its main channel.

Future

  • Mahon concluded: “As we come towards the end of 2020 the channel is emerging from this most difficult of years in rude financial health and creatively confident and distinct.“

  • The report caveated this. “With the full extent of recession in the UK still unclear we are maintaining a prudent approach, with contingency plans remaining in place if recovery is slower than anticipated.”

  • Looking forward, it says it has “increasing competition for viewers”. With the number of TV providers launching in the last year, it is hard to disagree. Just look at Disney+ which today has launched season two of the Mandalorian, which threatens to suck up Channel 4's Friday audience. A threat that wasn't there during the period this annual report covered.

  • If the advertising market continues improving (it may well be a pre-Christmas lurch or an artificial blast of soon-to-be voided 2020 spend), Channel 4 will continue unlocking content budget. It spent £660m on content in 2019, gave it “momentum” to ride out the 2020 slowdown.

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