Channel 4 reports biggest ever deficit in 2023 as investment in originals rises
UK pubcaster Channel 4 recorded its biggest ever deficit in 2023 as investment in original content reached its second-highest level.
In its annual report for 2023, which was delayed due to the UK general election earlier in the year, Channel 4 reported a deficit of £52m (US$68m). In 2022, the pubcaster made a surplus of £3m, which followed record surpluses in 2020 and 2021.
Channel 4 put the deficit down to funding of its “digital transformation,” as well as investment in original content, the latter reaching its second-highest level ever at £520m. The broadcaster expects to record a smaller deficit in 2024.
Total investment in content in 2023 was £663m, representing 65% of total revenue, a similar proportion to which will be invested in 2024.
Revenue in 2023 was £1.02bn, topping £1bn for the third consecutive year, although this was down slightly on the £1.14bn made in 2022 amid steep TV advertising market declines. Revenue in 2024 is expected to be broadly in line with 2023.
Digital revenue increased by 10% year-on-year to £280m, accounting for 27% of total revenue, versus 22% in 2022. This figure is forecast to increase to 30% in 2024, a year ahead of target, with digital revenue expected to reach £300m.
Streaming views reached a record 1.6 billion in 2023, up by 14% from 2022 and set to surpass 1.7 billion in 2024.
Streaming minutes were up by 23% year-on-year to 56 billion, making up 15% of total Channel 4 viewing, and boosted by shows including music format The Piano, thriller The Couple Next Door, Dispatches documentary Russell Brand: In Plain Sight and comedy-drama Big Boys.
According to Channel 4, data in 2024 shows a 25% year-on-year increase in streaming minutes from January to August, which the pubcaster said outpaces “the biggest streaming services” in the UK. Growth in overall viewing in 2024 so far has been fuelled by new and returning shows including docuseries To Catch a Copper and The Push, hit format Married at First Sight, thriller The Gathering and coverage of the general election and Paralympic Games.
Of the aforementioned shows, The Piano was the top new series of 2023 and best-rated new format since 2017, reaching 8.8 million viewers. Married at First Sight was the most-streamed series in 2023, while Russell Brand: In Plain Sight was the top new show in general and the most-watched Dispatches on record.
Meanwhile, Channel 4 expects views on its YouTube channels to grow by 50% in 2024, with 200 hours of programming distributed on the platform on average each month. The pubcaster said viewing of full episodes on YouTube in 2024 has already surged by 300% year-on-year, while the Channel 4.0 channel has seen a 160% increase in UK views.
At a press briefing with journalists, CFO Lucy Thomas said: “This year we’ve seen a more stable advertising market than last year, however, factors including high interest rates, cost of living and low business confidence do continue to affect the TV market. The story so far is of a brighter first half, followed by a more challenging second half.
“Buoyed by the Euros, the market grew by 5% between January and June, with digital up more than 10%. The second half of the year is more challenging, with uncertainty around the impact of the autumn Budget statement affecting consumer confidence. So forecasts this year are rightly cautious. Industry predictions suggest the full year will be marginally up year-on-year.”
In the 2023 annual report, Channel 4’s CEO Alex Mahon said: “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. 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.”
