Channel 4 was voted Channel of the Year at the Broadcast Awards in January and again at the Edinburgh International TV festival in August. To be recognised in this way by colleagues and competitors in the television industry is gratifying.
Much more importantly, we got the same endorsement from our audience, with core Channel 4 growing its share while every other established terrestrial channel experienced another year of decline. In the shifting sands of digital media that achievement is a huge tribute to the highly talented staff working at Channel 4 and our external partners in the independent production sector.
Channel 4 continues to be a success because it consistently offers viewers something they can’t find elsewhere on their programme guides – innovation, distinctiveness, diversity, risk-taking – the core qualities set out in our public service remit. We stick to our remit because that is our job, but also because it is what viewers want us to do.
That distinctive Channel 4 perspective on the world reaches across the whole of our output, from news and current affairs, with ‘Channel 4 News’ and ‘Dispatches’ in outstanding form, to entertainment (where we won every new talent award on offer at the British Comedy Awards) and film and drama where films including ‘Death of a President’, ‘The Last King of Scotland’ and ‘Longford’, have been as strong, varied and controversial as ever, and, once again, have won awards around the world, including an Academy Award.
Even that is only half the story. The decision to make our FilmFour channel free to viewers was an even greater success than we had anticipated. Along with E4 and More4, which also grew their audience shares, Channel 4 Group now has four free-to-air channels available on all main platforms, as we prepare for the forthcoming switchover process. Our online services continue to blossom, expanding to include a radio service at 4radio.com as a prelude to our leading a consortium to bid for the second national digital radio multiplex in 2007. Towards the end of the year we launched 4oD our video-on-demand service, making us the first broadcaster in the world to make its entire commissioned schedule available.
These achievements on-air and online are all the more remarkable for being won in a difficult market. In 2006 Channel 4’s portfolio share of the television advertising market reached its highest ever level, but the TV advertising market as a whole declined significantly. As a result Channel 4’s surplus has fallen substantially compared to 2005, with a direct impact on our programme budget.
Whilst some of the pressure on advertising in 2006 was cyclical, we continue to believe that there will also be structural impacts on the model for commercially funded public service broadcasting arising from the drive towards switchover. We welcomed, therefore, the start of Ofcom's promised Financial Review of Channel 4 in the latter part of 2006, which provides a crucial opportunity for us to work with our stakeholders to ensure that, as we move from the analogue to the digital world, mechanisms are put in place to support Channel 4's ongoing contribution to public service plurality. In our 25th Anniversary year, there is a vital opportunity to agree the necessary policy actions now in order to ensure we can continue to fulfill our public purpose going forwards. The Government's decision, in its announcement on the BBC Licence Fee in January of 2007, to keep open the option of the BBC contributing to Channel 4's digital switchover costs was also welcome.
Of course we cannot rely solely on others to keep Channel 4 in good condition. Our strategy must evolve continually to accommodate the pace of change, and it will. But it is driven by a single underlying aim:- to give our very demanding audiences what they want, when they want it and on whatever platform they choose. That is how we intend to keep public service broadcasting as the pacesetter, not the also-ran of the digital world.