Despite corporation revenue reaching a record £995 million – up by £16 million on the previous year – Channel 4 made a pre-tax loss of £15 million in 2016 compared with a £26 million profit in 2015, according to its latest financial results.
Speaking at the annual meeting on Wednesday, chief executive David Abraham said the result of the EU Referendum had forced Channel 4 to dip into £15 million of its £215 million content reserves to fund events such as the Rio Paralympics.
Abraham, who is set to leave the broadcaster by the end of the year, said Channel 4 has allocated £35 million in cash reserves for 2017 as advertising uncertainty continues – and that Channel 4 is having to tighten its belt as it thinks about forward planning in a TV ad market that has declined by -4.2% over the last 12 months.
However, despite the challenging climate, the broadcaster reported record digital revenues of £102 million during the period – a 24% year-on-year increase. Digital now accounts for 10% of total corporation revenue.
Channel 4 also invested a record £695 million on programming – 10% more than in 2015. £501 million of that was original content spend on British programmes produced across the UK.
In terms of viewing, the main Channel 4 channel retained a 5.9% share of viewing, while the overall portfolio was down marginally compared with the previous year (10.5% and 10.6%, respectively).
There was also a 21% increase in All 4 views to 620 million – with almost 15 million users registered with Channel 4 at the end of the year, including over half of all UK 16-34s.
In a letter to Abraham and Channel 4 chair Charles Gurassa, Ofcom said while it recognises that Channel 4 is currently going through a significant period of change and uncertainty, overall it welcomes the broadly successful delivery of C4C’s remit and obligations in 2016.
“Changes in leadership, the Government consultation into its impact in the nations and regions, and the current downturn in the advertising market will all have an impact on C4C and its ability to continue delivering its remit,” Ofcom said.
“We will continue to engage with the Corporation on its plans to secure its continued delivery of the remit in the future, as well as how it plans to address the areas for improvement identified by our assessment or other issues that might arise.”
