UK broadcaster Channel 4 has reported a 2022 financial year in which it topped £1 billion in revenues for the second consecutive year with digital revenues increasing 14% annually to £255 million, 22% of total revenues, and a record £570 million spent on originated content.
The Channel 4 Annual Report 2022 found the broadcaster had achieved total revenues of £1.14 billion, just less than 2% below 2021’s record £1.16 billion. The company pointed to a second half of 2022 that included a significantly more challenging consumer environment, which has continued into this year. In 2022 digital advertising brought in £255 million, accounting for 22% of revenues, a 14% increase compared with 2021, and staying on track to reach Channel 4’s target – as set in its Future4 strategy - of 30% of revenues coming from digital advertising by 2025.
By the end of 2022, a 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, fully three years ahead of its 10% target. Combined with 22% of revenues from digital advertising made up the percentage of Channel 4’s income was not from linear advertising.
In all, Channel 4 recorded a pre-tax surplus of £20 million before exceptional items including the one-off retention payment of £17 million linked to privatisation. This marked the third year in a row the broadcaster has recorded a surplus, with Channel 4 increasing its net cash reserves to £253 million and group net assets to £560 million.
The channel also had a good year in the realm of streaming, and in 2022 it achieved 1.4 billion total views, just under of the record 1.5 billion views achieved during lockdown in 2021. Channel 4 noted that for context, 2021 had the advantage of increased home viewership due to people being required to stay at home in the first half of the year. In the second half of 2022, streaming views were 5% higher than the same period in 2021.
Channel 4 also continued to be the youngest profiling Broadcaster Video on Demand (BVOD) service in the UK, with 16-34-year-olds making up one-third of its user base. To date, 85% of the UK’s 16-34-year-olds have a Channel 4 streaming account. Since its launch in October 2022, Channel 4.0, a new digital brand aimed at young people, has generated more than 42 million views, with 75% from 13-24-year-olds. The broadcaster also continued to grow its footprint as one of the largest social media brands for young people in the UK, with a series of strategic commercial partnerships with digital platforms including YouTube, Snapchat and TikTok.
Looking at content, 2022 saw the broadcaster spend an all-time record of £713 million on programming, including £570 million on originated content and working with 170 independent production companies. Boosting its spending in the Nations and Regions, £228 million was invested in content from production companies outside of London, and two-thirds of originated show hours coming from the Nations and Regions.
Commenting on the Annual Report 2022, Channel 4 CEO Alex Mahon 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.”
Yet despite a solid 2022, Channel 4 saw headwinds towards the end of 2023. It noted that with inflation more persistent than forecasted, compounding the cost-of-living crisis for the UK consumer, the TV advertising market is experiencing a tough cyclical downturn, and is forecast to be down around 6% for the year. Digital revenues are expected 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%.
Channel 4 expects the ad market to improve into Q4 of this year, with the broadcaster forecasting 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.
By the end of 2022, a 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, fully three years ahead of its 10% target. Combined with 22% of revenues from digital advertising made up the percentage of Channel 4’s income was not from linear advertising.
In all, Channel 4 recorded a pre-tax surplus of £20 million before exceptional items including the one-off retention payment of £17 million linked to privatisation. This marked the third year in a row the broadcaster has recorded a surplus, with Channel 4 increasing its net cash reserves to £253 million and group net assets to £560 million.
The channel also had a good year in the realm of streaming, and in 2022 it achieved 1.4 billion total views, just under of the record 1.5 billion views achieved during lockdown in 2021. Channel 4 noted that for context, 2021 had the advantage of increased home viewership due to people being required to stay at home in the first half of the year. In the second half of 2022, streaming views were 5% higher than the same period in 2021.
Channel 4 also continued to be the youngest profiling Broadcaster Video on Demand (BVOD) service in the UK, with 16-34-year-olds making up one-third of its user base. To date, 85% of the UK’s 16-34-year-olds have a Channel 4 streaming account. Since its launch in October 2022, Channel 4.0, a new digital brand aimed at young people, has generated more than 42 million views, with 75% from 13-24-year-olds. The broadcaster also continued to grow its footprint as one of the largest social media brands for young people in the UK, with a series of strategic commercial partnerships with digital platforms including YouTube, Snapchat and TikTok.
Looking at content, 2022 saw the broadcaster spend an all-time record of £713 million on programming, including £570 million on originated content and working with 170 independent production companies. Boosting its spending in the Nations and Regions, £228 million was invested in content from production companies outside of London, and two-thirds of originated show hours coming from the Nations and Regions.
Commenting on the Annual Report 2022, Channel 4 CEO Alex Mahon 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.”
Yet despite a solid 2022, Channel 4 saw headwinds towards the end of 2023. It noted that with inflation more persistent than forecasted, compounding the cost-of-living crisis for the UK consumer, the TV advertising market is experiencing a tough cyclical downturn, and is forecast to be down around 6% for the year. Digital revenues are expected 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%.
Channel 4 expects the ad market to improve into Q4 of this year, with the broadcaster forecasting 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.
