Channel 4 has reported a challenging year, amid a “tough cyclical TV advertising downturn”, but said this is beginning to stabilise.
In 2023, its total revenue dropped by 10.4 per cent year-on-year to £1.02bn, including a 9.7 per cent decline in total advertising revenue. It led to a record loss of £52m, compared to the previous year’s pre-tax surplus of £20m.
In a brighter spot for the broadcaster, digital revenues grew by 10 per cent to £280m, now making up 27 per cent of total revenue – a figure expected to hit 30 per cent in 2024, one year ahead of forecast.
Hit shows like Married at First Sight, which became Channel 4’s most-streamed series in 2023 as it amassed a total watch time of nearly seven billion minutes, boosted overall viewing growth this year.
Channel 4 chief Alex Mahon said: “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 stabilisation of the advertising market.
“We are also at the point where digital viewing overtakes linear across the market. By committing even further to our digital transformation with our Fast Forward strategy, we are keeping Channel 4 ahead of the curve and protecting its ability to continue delivering trusted and distinctive content to the British public.”
However, Channel 4 posted an unexpected year-on-year drop in content spending for 2023, due to uncertainties in the advertising market that failed to rebound following a difficult start to the year.
Advertising to stabilise
Advertising revenue is expected to stabilise in 2024, which an Enders Analysis report said will provide a more stable planning base.
“Recent volatility has tested the broadcaster’s flexibility and proactiveness, above its competitors who are more insulated,” wrote analysts at Enders.
Enders pointed out other issues for Channel 4, including a “quantifiable drop” in the relative success of programming compared to pre-Covid-19 and a continued loss of broadcast viewing share among 16-34-year-olds.
Separately, Ofcom released its response to Channel 4 Corporation’s Statement of Media Content Policy, in which the broadcaster is legally required to prepare an annual statement outlining its plans for meeting content duties and reporting past performance.
The regulator recognised the “challenging year” faced by Channel 4, but it said that the corporation performed well against its media content duties in 2023.
Ofcom said: “But we now expect to see more detail on how these high-level strategic aims will be implemented, as well as specific targets for delivery.
“Second, Channel 4 must ensure it is investing in commissioning and programming outside of London,” it added. Channel 4 says it is on track to reach 52 per cent of spending outside London in 2024.
The UK government announced in January 2023 that Channel 4 would remain in public ownership, and Ofcom is soon set to publish its decisions on the conditions for the broadcaster’s new licence.