Channel 4’s total revenue rose 1.6% to £975m in 2018 after digital growth mitigated a 0.9% decline in TV advertising and sponsorship revenues.
According to Channel 4’s annual report, published today, the broadcaster generated £791m in TV advertising and sponsorship revenue in 2018, down from £798m in 2017, but digital revenues rose 11.3% year on year to £138m.
Overall, Channel 4’s TV, sponsorship and digital revenues rose 0.8% year on year to £929m.
4Sales, Channel 4's sales house, sells advertising on behalf of UKTV and BT Sport. It generated £994m in linear revenue in 2018, down 0.8% year on year, after three years of drawing in more than £1bn (2017: £1.00bn; 2016: £1.06bn; 2015: £1.05bn).
Jonathan Allan, chief commercial officer, said Channel 4’s ad revenue performance relative to the market was "very good".
He continued: "I think we were probably ahead of the market in terms of TV. I think the market was down just over 1% last year in terms of linear and overall I think revenues were broadly flat.
"[Our] overall revenues were up about 1% in terms of advertising perspective. We had a really good year last year we felt relative to the competition and long may that continue."
Channel 4’s ad revenue figures include both adspend on its portfolio of channels and digital platforms, as well as contribution from the advertising space sold on behalf of BT Sport and UKTV. Allan said ad revenues on Channel 4-owned properties were in line with the overall figure.
Allan added that he was hoping for a flat TV ad market this year: "The general consensus is we’ll probably be down about 1%, but there’s still six months to go and I’m hoping to get to flat – ever the optimist."
Channel 4 generated a £5m pre-tax surplus in 2018, compared with deficits of £17m and £15m in 2017 and 2016 respectively. As a publicly owned broadcaster, Channel 4 does not make a profit and invests all of its revenue back into the business.
The main channel’s audience performance held up last year, maintaining its 5.9% share of all viewing, according to Barb figures. However, the Channel 4 portfolio as a whole lost share, dropping from 10.5% in 2017 to 10.2% of all viewing in 2018.
In comparison, ITV’s portfolio increased its share from 21.7% of viewing in 2017 to 23.2% in 2018 after its core channel’s share rose from 15.5% in 2017 to 16.9% last year. The Channel 5 portfolio of channels’ share of viewing declined from 6.5% in 2017 to 6.3% in 2018.
Channel 4 has signed a major new deal with the production industry, paving the way for it to host shows on All 4 and repeat its content on linear channels for up to three years after the last commission of a series.
Under these new terms of trade, the production companies will now own all the rights for Channel 4 programmes outside the UK and after Channel 4's three-year licence period expires.
Alex Mahon, chief executive of Channel 4, said the new terms would make Channel 4 "a more attractive partner than Netflix" and other subscription video-on-demand services, which generally insist on all rights.
Channel 4 also announced plans to launch a new strand of content targeted at teenagers, backed by a seven-figure investment in original commissions, that will be distributed on YouTube and other social channels.
The broadcaster's portfolio viewing share among 16- to 34-year-olds declined by 3% year on year to 15.9% in 2018. E4's share among the same age group fell 9% to 4.8% in the same period.
Channel 4 paid Allan £654,000 in 2018, up 24.8% year on year.
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