Agency concern mounts over soaring C4 inflation

Concern is growing among agency TV buyers over Channel 4’s mounting media inflation.

High demand and weakening audiences during the first two months of 1996, have led to inflation of up to 24 per cent across a number of audience demographic groups.

And high demand for the channel in the last three months of 1995 meant that for some audiences it was more expensive than ITV, although ITV should command a premium for delivering bigger numbers.

One of C4’s biggest audiences is young adults, but increased demand of 14 per cent year on year in February and a decline in young adult impacts of 11 per cent have contributed to inflation of about 24 per cent.

In January, inflation for the same audience was about 16 per cent. Total demand for Channel 4 in January was up 18 per cent year on year compared with flat demand for ITV.

The price of housewives with children audience was up 15 per cent year on year in January, while the all-adults audience was up ten per cent.

The flattening of demand for ITV in the last quarter of 1995 had the effect of making C4 more expensive than ITV for similar audiences. Young adults were 12 per cent more expensive than ITV in October, ten per cent more in November and 18 per cent more in December.

“Buyers are now aware of a dramatic reduction in the cost differential between the two terrestrial channels,” says one buyer. “When C4 was cheap and delivering audiences it was a great thing to tell your client.”

However, another buyer maintains the channel’s inflation is not its fault. “It is churlish to complain that it is too successful. And if you’re any good as a buyer you can negotiate protection from inflation in your annual deal.”