Digital Boosts Channel 4 Financials

LONDON: Despite heavy declines in ad revenue, Channel 4 was able to break even in 2009, thanks to cost-cutting efforts and an increased contribution from digital activities.

The British broadcaster reported a surplus of £300,000, with profit contribution of £53.4 million from digital TV and £3 million from online and on demand offsetting a £61.6 million loss on the core channel. Total revenues fell 8 percent to £830.3 million, including a 10.5-percent decline in ad revenues to £789.7 million, digital TV revenues, meanwhile, were up 4 percent to £181.3 million. In the year, Channel 4 reduced its program spend by 8 percent to £548.3 million. Overall costs from continuing operations fell 8 percent to £778.7 million. Profit before tax was £3 million, as compared with a loss of £7.3 million in 2008.

Chief executive David Abraham commented: “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.”