U.K’s Channel 4 Posts Revenues of $1.6 Billion for 2023

U.K. public service broadcaster Channel 4 has revealed revenues of £1.02 billion ($1.6 billion) for 2023 despite what has been billed as the worst advertising downturn since 2008.

Channel 4 CEO Alex Mahon unveiled the results as part of the broadcaster’s latest annual report, which was published later than usual due to the general election earlier this summer.

Despite this, the network has been operating on a planned deficit of £52 million, which it warned about earlier this year when Mahon also announced in Jan. the company would be cutting 18% of its workforce and axing a number of underperforming linear channels in a bid to reduce operational costs by 2030. The broadcaster expects a financial deficit next year also, albeit a smaller one.

The annual report says the deficit has enabled the broadcaster, which is publicly owned and commercially funded, to continue investing in content (£520 million in 2023) and its “digital-first future” as it focuses on its streaming platform.

While the TV production industry has clung to the mantra of “survive until ‘25” in order to get through a second year of the commissioning downturn, Channel 4 said it had “prioritized” investing in content in 2023, with a spend of £663 million (65% of its turnover) of which £520 million was spent on original content. In 2023 it said competition series “The Piano” was its top show of the year, and its best rated new format in six years with an audience of 8.8 million viewers. This year it has spent significant resources on the Paris Paralympic Games, which 20 million people tuned into.

In a sign of its investment in digital, revenues there jumped up by 10% to £280 million, accounting for 27% of total revenues (in 2022 digital accounted for 22% of total revenues). In 2024 they are forecast to exceed £300 million, meaning Channel 4 will reach its intended target of 30% of total revenue coming from digital a year earlier than planned. The company also said streaming minutes were up by 23% while non-advertising revenue came to £101 million.

“2023 was another year of strong strategic progress as we grew the size of our digital business, delivering market-leading digital revenue diversification and record streaming viewing,” said Mahon. “Our planned deficit and reduced cash were the intentional results of financing our transformation from linear to digital. During this transition, we need to keep buying the different formats and genres people like to watch on linear and streaming. As a result of our investment in this transformation, we are already seeing the upside of prioritising spend on content and digital innovation.”

“In 2024, we have set out the next phase of Channel 4’s growth with a robust and ambitious strategy for the future and have seen a stabilisation of the advertising market. We are also at the point where digital viewing overtakes linear across the market. By committing even further to our digital transformation with our Fast Forward strategy, we are keeping Channel 4 ahead of the curve and protecting its ability to continue delivering trusted and distinctive content to the British public.”

The annual report comes at a time of continuing turmoil for the U.K. TV industry due to economic instability caused by the advertising downturn, inflation and deep-pocketed streamers jockeying for eyeballs and talent.

As well as planning to make around 200 of its 1,200 staff redundant, Channel 4 is also planning to sell its central London headquarters and merge various commissioning and content teams, such as drama and film.

Channel 4 spent much of 2023 fighting off Conservative plans to privatize the company. Ultimately it was decided it would remain publicly owned but, for the first time in its 40-year-history, be allowed to produce its own content rather than outsourcing to independent production companies. U.K. producers body PACT has expressed concerns about the change, warning it could further damage the U.K.’s already precarious production industry.