C4 Posts Revenue Gains, Inks New Pact Terms of Trade Deal

Channel 4 has released its 2018 financials, showing improved revenues of £975 million ($1.2 billion), and has announced a new Terms of Trade agreement with Pact to ensure that both organizations are “fit for purpose to operate in the digital era,” Chief Executive Alex Mahon said.

The new Terms of Trade enable Channel 4 to use its original commissions across its portfolio of channels and on-demand services, including All 4, within the license term without negotiating further rights. The existing Terms of Trade give C4 limited linear transmissions on set channels and seven-day catch-up, with further payments or negotiations with the rights holders required for broadcast on other channels or VOD. Indie producers, meanwhile, now gain full control and ownership of the secondary revenue generated by the IP they create, retaining all net receipts from exploitation internationally and domestically after the expiry of the Channel 4 license term. Channel 4 currently shares in the secondary value generated internationally and in the U.K. for the lifetime of the program. The new Terms of Trade also extend to E4 commissions.

Mahon commented, “For the first time, it will give us the full freedom to innovate with how the content created in partnership with indies appears across on-demand and channels. Channel 4 exists to support our creative sector and so it’s also incredibly significant that, unlike many of our new digital competitors, this deal is designed to ensure independent producers get to fully benefit from the IP they create. This is about Channel 4 being an ever more attractive creative partner.”

Pact Chair Sara Geater added, “This is a deal mutually beneficial to Channel 4 and the independents in a fast-changing market. It gives Channel 4 freedom to show programs across their channel portfolio and control during the term of the license in the U.K. territory, with the independents benefitting from more strategic scheduling of their programs. This deal shows that the Terms of Trade continue to be fit for purpose and adaptable and are crucial for the continued success of the indie production sector both in the U.K. and globally.”

The news of the updated Terms of Trade came as C4 published details of its performance in 2018, with revenues increasing to £975 million ($1.2 billion) and a surplus of £5 million ($6.4 million). Channel 4 invested £662 million ($842 billion) in content last year.

Channel 4 Chair Charles Gurassa said, “2018 was a year of strong performance for Channel 4 both creatively and commercially. Against the background of a changing media landscape and a challenging economy, Channel 4 continues to be seen as a compelling brand to viewers, advertisers, producers and talent. Our digital viewing and revenues enjoyed another year of rapid growth and Channel 4 delivered high levels of public service impact. I’m pleased that the corporation delivered a £5 million surplus and, with a strong balance sheet, remains in robust financial health—well prepared to navigate any Brexit-related volatility in the advertising market over the coming months.”

Channel 4 also announced today a new content strand for teens, launching in early 2020. This content for the 13-to-16 set, including a seven-figure investment in original commissions, will be made available on YouTube, Instagram, Snapchat and Facebook.

“Despite a challenging market, Channel 4 delivered great results in 2018, with growth in our revenues and digital playing a more important role than ever,” Mahon said. “Most importantly we continued to make an impact with innovative, purposeful and popular television, film and journalism. It’s a phenomenally exciting time to be at Channel 4 as we transform the organization to be truly representative of the whole country with the 4 All the U.K. strategy and continue to accelerate our digital growth and increase investment in our relationship with young viewers.”