Channel 4 has published its delayed Annual Report this lunchtime with commercial revenue breaking £1bn for the first time in its history.
It comes as the future for the commercially-funded public service broadcaster remains uncertain, this was highlighted by the delay in publication.
Chief Executive, Alex Mahon told the Digital, Culture, Media and Sport Committee earlier this week that there had been “some differences in opinion” with Culture Secretary Nadine Dorries, who’s department wanted to reword sections about its “future financial sustainability.”
Chair (Julian Knight): In respect of your future sustainability, what form of words did DCMS ask to be inserted into the report?
Dr (Alex) Mahon: It was really just questions about whether our wording was in line with Government policy.
Q19 Chair: What was the one thing that really stuck out for you?
Dr Mahon: It is normal in an annual report for independent auditors to talk about whether the organisation is sustainable, to have a going concern position, to talk about whether you assume the organisation will continue. The auditors had a very strong view on that, as do we. As you know, Government policy is to question whether Channel 4 is financially sustainable. That is the difference of opinion.
Q20 Chair: Okay. I am drawing from that that there was a form of words that was in and remains in the report that it questioned, and that question related to the fact that it wanted to say that, potentially, it was not sustainable in the long term. Is that a fair summation?
Dr Mahon: Yes, but the DCMS is now happy for the annual report to proceed as written.
Q21 Chair: Have you ever encountered a process like this?
Dr Mahon: It is the first time to my knowledge in 40 years that there have been queries about the annual report.
The DCMS agreed that the original report could be submitted to parliament as it was originally written.
Digital
In addition to achieving £1bn in revenues, Channel 4 also recorded a pre-tax surplus of £101m.
It saw digital advertising grow 40% year on year and it now accounts for 19% of total corporate revenue. Its share of the digital advertising market also grew to 35%, exceeding its linear share (28%).
The streaming service, All 4 achieved 1.5bn views over the period, which is on target to deliver 2bn views by 2025.
This all forms part of its Future4 strategy, its 5 year plan to transform itself into a digital public service broadcaster.
“2021 was an outstanding year of creative excellence, exceptional digital growth and record-breaking financial performance that saw Channel 4 over-deliver on its remit and successfully continue its transformation into a digital-first PSB,” said Mahon.
“These results demonstrate that Channel 4’s business model delivers dynamic growth, revenue diversification and long-term sustainability. Financially, Channel 4 is in the most robust health it has ever been and our results have laid the foundations for ongoing investment, financial success and stability.”
Nations and Regions
Channel 4 spent £671m on content in 2021, its 3rd highest content spend to date. In 2022, it aims to reach £700m – this would be its highest content investment ever.
£492m was spent on originated content (+33%, 2020: £370m). 55% of its main channel content was made in the Nations and Regions.
The broadcaster now has 400 staff based outside of London – across Leeds, Manchester, Glasgow and Bristol, with plans to grow this further in 2022.
In May Channel 4 outlined proposals to become a Northern-based broadcaster, with the majority of its staff working outside of the capital. Published in response to the government’s privatisation plans, 4: The Next Episode stated that it would move its head office to Leeds and “streamline” its London presence.
4Skills
Last year Channel 4 announced a “major investment” in its Leeds-based training and development programme 4Skills. This is a pogramme designed to open up opportunities in broadcasting and addressing skills gaps across the Nations and Regions, with a particular focus on disadvantaged young people.
From this year, it plans to help over 15k young people each year – spending £5m per annum.
Diversity
Channel 4 underlined its commitment to “representing the whole of the UK” through dramas, such as Manchester-based It’s a Sin, through to its The Black To Front Project and the Tokyo 2020 Paralympic Games.
18% of its staff were ethnically diverse at the end of 2021 – its target is 20% by the end of this year. The proportion of its ethnically diverse leaders increased from 9% in 2017 to 17% in 2021.
Channel 4’s Chair Sir Ian Cheshire concluded:
“Our exceptional financial performance demonstrates Channel 4’s long-term sustainability and, through its Future4 strategy, it will play a major and unique role in strengthening and levelling up the creative industries and creating new jobs and opportunities for young people across the UK.”
