LONDON — Channel 4’s commercial arm 4 Ventures, whose main objective is to return value to the core channel, announced Thursday it had halved losses to £28 million ($44 million) in 2002 following a year of cutbacks that included a 30% headcount reduction across the group and the closure of its FilmFour production arm.
Despite a tough economic climate, 4 Ventures, which was formed in January 2001 to house all the commercial activities of C4, was able to grow revenue by 20% to $196 million thanks to increased interactive revenue from “Big Brother” ($11 million) and an improved performance by digital web E4, which doubled its share of 16-34-year-old viewers and saw its ad and sponsorship coin rise by 79%.
E4 increased revenue 36% to $66.3 million and is expected to breakeven a year head of schedule in 2004. Company has invested $86 million in the channel and is launching E4 +1, a time shifted version of the web, in July.
FilmFour channels reported a 7% drop in revenue to $19 million due to the collapse of ITV Digital last year, resulting in the loss of 80,000 subscribers. The division, however, managed to cut losses by 40% to $11 million and expects to breakeven in 2005. Company has so far invested $78 million.
C4’s new 4 Rights division, which includes Channel 4 International, saw profits rise 32% to $17million while 4 Learning returned a small operating profit of $156,000 in 2002 after recording a loss of $2.8 million a year earlier.
While the results are encouraging, C4 chief executive Mark Thompson said he wants to double 4 Ventures revenue contribution over the next five years bringing the company into line with BBC Worldwide, Carlton and Granada. The commercial arm generates just 15% of the broadcaster’s overall revenue of $1.3 billion, substantially lower than BBC Worldwide, Carlton and Granada.
“The proportion of revenue we’re getting in is not particularly high and should be higher,” he said. “We think we’ve made progress despite it being a tough year. We’ve made a lot of changes and we’re going to continue to look very hard at the business.”
Thomson said he expects the commercial arm to halve its losses again in 2003.