C4 breaks even despite advertising downturn
Record digital media profits and tight budgeting helped Channel 4 to break even last year - despite the worst advertising downturn in its 28-year history, the broadcaster said today.
Channel 4 released its Report and Financial Statements for 2009, which showed how it avoided slipping into loss.
The broadcaster was hit by an "unprecedented" tumble in TV advertising revenues, which spiralled by more than 10% year on year to £706.7 million, against a decline for TV advertising as a whole of nearly 12%.
The broadcaster managed to achieve a surplus of £0.3 million, compared with £1.8 million in 2008.
A £53.4 million profit came from digital TV - as well as £3 million from its online/on demand sections - helping to offset a £61.6 million loss on the broadcaster's core channel.
Chief executive David Abraham said: "It's credit to everyone working here that Channel 4 has come through such a sharp downturn with our share of advertising revenues and ratings and our cash reserves intact and that we've continued to deliver creative excellence despite having significantly less money to spend on content.
"We have created a stable financial base that allows us to commit with confidence to a fresh round of creative and commercial innovation, renewing Channel 4's schedules post-Big Brother and positioning ourselves to take advantage of the opportunities that arise from the ongoing convergence of television and other media."
The broadcaster's total TV viewing share took a slight 3% slip, standing at 11.5%.
The woeful market conditions led to an 8% fall in overall turnover to £830.3 million, compared with £906.1 million in 2008.
The company slashed its continuing operations costs by £68.2 million to £778.7 million.
Spending on programmes has been cut by more than £50 million, from £598.6 million in 2008 to £548.3 million last year.
Its digital TV channels - E4, Film4, More4 and 4Music - grew their combined share of total TV viewing by 11% to 4.1%.
They bucked the market trend by piling on £6.3 million in extra revenues, bringing them up to £181.3 million.
They also delivered a 43% increase in profit before tax to £53.4 million.
The broadcaster said a decline in display advertising online was offset by improved revenues from the video-on-demand service, 4oD, which enjoyed a 60% year-on-year increase in full-length programme views to 218 million, helping a 31% year-on-year increase in visits to channel4.com and e4.com to 230 million.
Profits from digital largely offset the loss of £61.6 million on the core channel, which was hit by a 14% or £93.6 million revenue decline to £575.1 million.
A redundancy programme also contributed to an £8.7 million year-on-year reduction in employment costs in 2009.
Group finance director Anne Bulford, who was acting chief executive from October last year to the start of May, said: "These results clearly demonstrate the value of Channel 4's long-term investment in making our content available digitally and the tight controls we have exercised over costs."
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