C4 wins its largest share of UK TV advertising to date

Claire Billings,, brandrepublic.com, Tuesday, 29 April 2003, 1:40pm,

LONDON - Channel 4 has seen its share of the television advertising market grow to its largest levels to date, with its peaktime audience in 2002 growing to a record 9.7% share as the broadcaster confirmed a return to profit.

At its annual results presentation today, Channel 4 said advertising and sponsorship revenues rose to £646m, helping the broadcaster post pre-tax profits of £16.5m against a £28m loss in 2001, its first since launch.

Turnover rose to £763m from £734m, as Channel 4's share of UK television ad revenues grew to 24.1% from 23.5% with advertising and sponsorship revenues rising by 4%.

The broadcaster began a wide cost-cutting strategy in 2001 following the appointment of chief executive Mark Thompson, aimed at reducing overheads and redirecting funds into programming. So far, around 280 jobs have been axed, leaving the company with around 900 staff across its main channel and its commercial arm 4 Ventures.

The company also closed its FilmFour film production business because, according to Thompson, it was difficult to relate what Channel 4 was doing creatively and culturally with FilmFour's output.

Thompson said the cutbacks had resulted in a reduction in non-programming spend of 20%, and the broadcaster had set its biggest programming budget to date of £430m for 2003. This compares with a 2002 budget of £400m, although it actually spent £426m.

Thompson said the £430m earmarked for programming this year would increase as the ad market picks up. He said that actual programming spend for 2003 would "depend on ad income through the course of this year".

He said: "The nature of ad revenue is volatile. We are being prudent in forecasts and will increase [revenues] by enriching the schedule."

The main channel retained its audience share of 10% in 2002, as its peaktime audience grew to 9.7%, the highest in its 20-year history. Its share of 16- to 34-year-old viewers climbed from 12.6% to 12.8% and its share of the ABC1 audience increased from 10.6% to 11%.

Thompson said the broadcaster was on target to achieve its aim of cutting non-programming costs by 30% in 2003, having already made savings of 20% in 2002. He said the group aimed again to halve losses at its commercial arm 4 Ventures, having already reduced losses this year by 53% to £28m.

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This article was first published on brandrepublic.com