The poor performance of its cable and satellite channel FilmFour and its youth entertainment channel E4 have hit Channel 4 hard.
Its film production arm, also called FilmFour, performed badly following high-profile flops. Most recently, a lacklustre adaptation of Sebastian Faulks' novel 'Charlotte Gray', starring Cate Blanchett, did badly at the box office. The film cost £17m to make, FilmFour's most expensive venture to date, and although it did not make a loss, profits were tiny on what FilmFour hoped would be a hit.
The loss, its first in a decade, will mean hard choices for new chief executive Mark Thompson, who will be looking at ways to cut back and ensure a return to profitability.
The results could put at risk Channel 4's long-running soap 'Brookside', which has seen its viewing figures fall to around 2m from long-gone highs of 5m.
The soap, which costs the station more than £16m a year to make, compares poorly with the rising viewing figures of teen soap 'Hollyoaks', which has seen its viewing and financial performance steadily rise.
Mersey Television's Phil Redmond, also behind 'Grange Hill' and 'Brookside', created 'Hollyoaks' in 1995. It is now Channel 4's highest-rated programme in early peak viewing, attracting 5m viewers each week, predominantly 16- to 24-year-olds.
Channel 4 recently clinched a £9.5m deal with Nescafe to sponsor the flagship teen show for a 12-month deal. The deal was the broadcaster's biggest sponsorship agreement to date.
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