LONDON – U.K. commercial web Channel 4 announced Tuesday it had returned to a pre-tax profit of £16.5 million ($25.7 million) in 2002 after plunging to a loss of $44 million a year earlier, thanks to increased revenues and a 20% cut in non-programming costs.
Despite a volatile advertising market revenue was up 4% to $1.2 billion — ad and sponsorship coin grew 4% to $1 billion, although company is predicting a loss in ad revenue in the first half of 2003.
With a net cash balance of $103 million, chief executive Mark Thomson said C4 is now on a “stable financial footing” which has enabled the network to set its highest ever program budget for 2003 of $671 million. Company plans to reduce non-programming costs by 30% in 2003 and confirmed it would not be making any more staff cuts this year.
C4 managed to retain its audience share of 10% and achieved a 9.7% share of viewing in peaktime – up 5% — its highest share in 20 years. This compares to a 10% fall for commercial rival ITV1 and a 3% drop off for pubcaster BBC1, which shows how difficult it is for the largest terrestrial broadcasters to maintain share in an increasingly competitive market where over half of U.K. homes have multichannel TV.
“Last year was a year of progress but we have a lot more to do creatively,” Thomson admitted. “The challenge for 2002 was to continue Channel 4’s creative success on-screen while ensuring Channel 4 could respond to these tough market conditions by re-establishing a sound financial basis for the future.”