Channel 4 says ad recovery will help fill Big Brother gap

Channel 4 says a strong recovery in the advertising market last year allowed the broadcaster to increase its investment in original programming and marketing.

The company reported a 12.6% increase in revenue to £935.2m for the year to 31 December 2010. Operating profit reached £49.3m, up from £3.9m the previous year.

Advertising revenue increased 15.9% to £819m, ahead of the 14.7% total advertising market increase.

Channel 4 said “better market conditions” allowed it to invest £580m in content in the year, up £50m from 2009.

The channel spent £41.5m on marketing, up £9.2m on the previous year, which included campaigns such as the launch of Channel 4 HD on Freeview.

Chief executive David Abraham, who joined the broadcaster last year, says: “2010 was a year of transition and Channel 4 has entered 2011 ready for the future…we also increased cash by £49.5m which will be used to invest in content and key strategic objectives in coming years; this puts us in a stronger position to meet the challenges of the future.”

Abraham also warned that 2011 would not be as strong as 2010 and said Channel 4’s advertising revenue for the first quarter of this year was flat. Abraham expects ad market growth will slow down to about 2% this year but did not comment on his predictions for Channel 4’s ad revenue for 2011.

Rival ITV also warned of “continuing volatility” in the advertising market this year as it revenue growth begins to slow (11 May).

Channel 4’s new chief creative officer Jay Hunt unveiled a raft of new commissions today that she says bring a sense of “mischief” and “risk” back to the channel and to plug the gap left by Big Brother, now owned by Channel 5.

Among the new acquisitions was Drugs Live, a series that is set to see members of the public consume Class A drugs under controlled clinical circumstances live on TV.

Hunt says: “I believe Channel 4’s future lies in pieces that take risks…it’s more important than ever that Channel 4 is prepared to challenge the status quo, to provoke debate and, above all, to be brave.”

The broadcaster will also create more digital content this year, aiming to get linear viewers engaged online. This will include an online news club to “contribute to the news agenda” and a “huge” health database that will form part of a scientific study around new programme The Food Hospital.

Abrahams adds that Channel 4 will also invest further in its “viewer relationship management strategy”, with more announcements to come soon. He says a current live example of this strategy includes the 4oD iPad app.

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