Channel 4 has released its annual report for 2022, ending the year with revenues of £1.14 billion but reporting the second half of 2022 was a “significantly more challenging consumer environment, which has continued into this year.”
Looking into 2023 and beyond, the report says “the TV advertising market is experiencing a tough cyclical downturn, which Channel 4 forecasts will be down around 6% for the year” but despite this, Channel 4 says it expects its digital revenues to grow by double digits to represent 25% of revenues in 2023, while BVOD is forecast to grow above most media in 2023 at circa 12%.
In terms of content spend, it says that “despite significantly tightening the reins for the second half of the year, Channel 4’s underlying cash investment in content remains on track to increase in 2023 over 2022, though playout of this will be phased across this year and 2024.”
The broadcaster says it expects the ad market to improve into Q4 of this year and forecasts full year revenues “above £1 billion.”
“2024 is expected to be more stable as the economy improves with advertising demand buoyed by a US Presidential election, Paralympic and Olympic Games in Paris, the Euros Football and a forthcoming UK General election. Channel 4 remains on the hunt for brilliant creative ideas and new content opportunities.”
Channel 4’s plans to diversify its revenue base from linear advertising saw digital advertising bring in £255 million in 2022, accounting for 22% of revenues, a 14% increase over 2021.
By the close of 2022, one-third of Channel 4’s total revenues no longer came from linear advertising. Non-advertising revenues, including film and partnerships revenue, reached £121 million, 11% of Channel 4’s total revenues in 2022.
Channel 4 recorded a pre-tax surplus of £20 million before exceptional items including the retention payment of £17 million linked to privatisation. Channel 4 increased its net cash reserves to £253 million and group net assets to £560 million.
In 2022 the broadcaster spent £713 million on content, including £570 million on originated content and working with 170 independent production companies.
2022 saw £228 million invested in content from production companies outside of London, and two-thirds of originated show hours coming from the Nations and Regions.
Sir Ian Cheshire, Chair of Channel 4, said: “Last year as we emerged from the pandemic, Channel 4 faced unprecedented challenges: privatisation, political instability and macroeconomic turbulence continuing into this year. Channel 4’s exceptional team has steered the organisation to the benefit of British viewers and the creative industries. Channel 4 is focused on being more digital as a broadcaster and more commercial as a business, transforming into a public service streamer. With a uniquely strong brand, Channel 4 is very well-positioned. However, we need Government’s help to address prominence, so young audiences can continue to find safe and trusted British video that reflects their lives. There is no time to lose.”
Alex Mahon, CEO of Channel 4, said: “With Channel 4’s financial sustainability and ownership status no longer in question, we are doubling down on what we were created for: to deliver the best and broadest range of programmes that truly reflect British lives; to engage young people with genuinely public service content; and to prioritise digital growth to be where the audience is. As the industry sees through this cyclical advertising downturn, Channel 4 will be at the forefront, creatively more relevant, vibrant and distinctive than ever, especially for young audiences. We will continue to innovate, embrace change and adapt to the challenges of the future.”
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