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Channel 4 ready for the future

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Channel 4's Report and Financial Statements for 2010, published today, reveal the broadcaster was able to capitalise on better market conditions than anticipated last year and invest an additional £50 million more than budget into content across its portfolio. This was a real increase of £32 million on 2009 spend and helped to secure Channel of the Year awards for Channel 4 and E4.

The Corporation also delivered a surplus ahead of target, putting the organisation in a strong position to meet the challenges of the future through continued creative renewal and technological innovation.

Commenting on publication of the report, the Channel 4 Chairman, Lord Burns, said: 'As we deliver our public service mission in more complex ways, it is vital that we are accountable for our performance. With an enhanced remit, Channel 4 has new forms of accountability and today we publish the first Statement of Media Content Policy. It is encouraging to see that we continue to lead on measures that assess the audience's response to us around the key aspects of our remit. As ever there is room for improvement and I look forward to the next phase of creative renewal.'

Chief Executive, David Abraham, added: "2010 was a year of transition and Channel 4 has entered 2011 ready for the future. We have a new management team in place, we are refreshing our schedules and we are ready to provide content wherever our audiences want to consume it. Across 2010 the increase in our revenue allowed us to make extra investment in content and key technological developments to benefit the audience. We also increased cash by £49.5m which will be used to invest in content and key strategic objectives in coming years; this puts us in a stronger position to meet the challenges of the future."

Financial and competitive highlights in 2010

Across the Corporation revenues increased 12.6% to £935.2m (2009: £830.3m). Channel 4 total sales (which included Box TV from the start of 2010) increased advertising revenues by 15.9% to £819m (2009: £706.7m) compared to an advertising market increase of 14.7%. This grew Channel 4 total sales share to 24.8% (2009: 24.5%).

The organisation delivered an operating profit of £49.3m (2009: £3.9m) with an increased profit contribution of £54m from 4Channels (2009: £53.5m). Operating loss on the main channel was reduced from £59.4m to £7.7m. This equates to an overall Corporation profit after tax of £38.6m (2009: £0.3m).

All the channels benefited from the market recovery in television in 2010. Television advertising revenues grew by £87.5million, comprised of £63.4m on main Channel 4, £23.2million on the digital channels and £0.9million on TV video on demand.

Audience share across the portfolio was broadly flat at 11.4% (2009: 11.5%) with the digital channels growing their share of viewing to 4.4% (2009: 4.1%). Creative content across the portfolio won 195 awards.

2010 represented another strong year of growth in online with a 71% increase in on-demand programme views and on average a 19% conversion rate from TV to online (across the top 10 programmes). Future Media revenues grew by 34% (from £33.1m in 2009 to £44.3m in 2010).

Statement of Media Content Policy highlights in 2010

The 2010 Digital Economy Act introduced a new requirement for Channel 4 to publish an annual Statement of Media Content Policy which for the first time reflects the public service contribution across the group's content activities including digital channels, online content and film.

In 2010 the organisation demonstrated strong delivery against its remit. Across the year Channel 4 maintained a strong reputation for promoting alternative views and for being distinctive, stimulating and inspiring, with significant leads over other public service broadcasters in all of these areas.

Channel 4 also remains ahead on a range of key measures in terms of overall brand reputation but has seen a marginal decline in performance across some indicators. The broadcaster will look to address this small narrowing in its lead over the coming year.

Content spend increased by 5% to £578m with £362m invested in original content across all services. An increased proportion of Channel 4's first-run originated output and spend on the main channel was made in the nations and regions in 2010, 39% against a target of 35% (£125m). Expenditure in the nations accounted for 4.5% of first-run originated spend on the main channel, exceeding the 3% quota. This represents a significant increase from 2009.

Across the organisation, 10% of the 266 television production companies worked with were new to the organisation and content was commissioned from a further 91 digital suppliers.

68% of viewers said that Channel 4's factual programmes inspired change in their lives and the channel maintained its reputation as best for provocative documentaries. Channel 4 increased its lead over other channels for being best for cult comedy and the Film4 budget increased to £15m a year for 5 years from 2011.

Creative highlights across Channel 4's network in 2010 include Bafta-award-winning One Born Every Minute, Mo, Misfits, Inside Nature's Giants and Dispatches: Terror in Mumbai as well as This is England ‘86, The Inbetweeners, My Big Fat Gypsy Wedding, Four Lions and 127 Hours.

In 2010 Channel 4 was awarded Media Guardian Edinburgh International Television Awards Terrestrial Channel of the Year and E4 was named Channel of the Year at the Broadcast Awards.

The 2010 report is available at: http://annualreport.channel4.com/

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