Digital TV helps Channel 4 put up brave front to recession

Channel 4 was very much impacted due to last year's recession and surely the worst of its' kind in its' long history; this led to a decline of 14% year-on-year ad revenues for the broadcaster's main terrestrial network, in dollar terms it was down from £668.7m to £575.1m. According to annual report of Channel 4 the main channel's losses went up from £9.9m in 2008 to £61.6m last year.


However, Channel 4's digital TV services - namely, E4, Film4, More4 and 4Music - helped the broadcaster to put up a brave front to the last year's recession, increasing revenues by 4% year on year to £181.3m. A respectable 43% year-on-year rise in digital TV profits to £53.4m could be achieved.


Revenues for the online business were down 2% year on year to £32.8m, but the consolation is that savings on platform costs helped the division deliver a profit.Channel 4's Future Media division also contributed positive financial results, scoring in a pre-tax profit of £3m, compared with a £7.3m loss in 2008.A decline in online display advertising was effectively offset by improved revenues from video-on-demand service 4oD, which recorded a 60% year-on-year increase in full-length program views to 218m.


Channel 4's overall turnover declined 8% year on year to £830.3m. Profit was down from £1.8m in 2008, to £300,000 last year.Operational cost was lowered by 8% - £68.2m - year-on-year to £778.7m. This included an 8% - £50.3m - cut in the 2009 programming and content budget to £548.3m.


After adopting a redundancy route during the last three months of 2008, Channel 4's average monthly headcount was down 23% year on year to 696, contributing to an £8.7m cut in salary costs in 2009.


Anne Bulford, the group finance director Channel 4, who was acting chief executive from October 2009 to the start of May 2010, said: "These results clearly demonstrate the value of Channel 4's long-term investment in making our content available digitally and the tight controls we have exercised over costs."


David Abraham, the new chief executive, added: "It's a credit to everyone working here that Channel 4 has come through such a sharp downturn with our share of advertising revenues and ratings and our cash reserves intact and that we've continued to deliver creative excellence despite having significantly less money to spend on content.


We have created a stable financial base that allows us to commit with confidence to a fresh round of creative and commercial innovation, renewing Channel 4's schedules post Big Brother and positioning ourselves to take advantage of the opportunities that arise from the ongoing convergence of television and other media."



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