LONDON — Channel 4, the edgy U.K. hybrid pubcaster, has signaled a reduction in the amount it spends on acquired programs, as it re-ported an anticipated slump in full-year profits.
For the year ending Dec. 31, profits were £14.5 million ($29 million) compared with $97 million in 2005. Sales in-creased by 5% from $1.78 billion to $1.87 billion. But revenue from the broadcaster’s new-media activities more than doubled — up to $102 million from $49 million. Revenue from ad sales and sponsorship was flat at $1.64 billion.
The $78 million dip in ad sales at the main TV channel, which generated $1.4 billion, was balanced by the surge in ad sales from new digital channels — an $80 million hike to $256 million.
Station executives warned that the tough advertising market, combined with competitive pressure as the U.K. gears up for an all-digital world, would force C4 to spend less in the future on U.S. acquisitions to protect coin for domestic production.
Said C4 chairman Luke Johnson: “In 2007, we will be unable to increase program budgets in line with industry cost inflation, so inevitably our output will suffer somewhat.”
Added director of television and content Kevin Lygo: “Nothing gets cheaper. The last thing we are going to interfere with is domestic shows. My preference is to cut the spend on acquired programs, which will take some pressure off the budget as a whole.”
In 2006, the web spent $254.4 million on imports, up slightly on the previous year when it splashed out $225 million. Last year, C4’s program budget was $1.03 billion.
C4, a public corporation, is campaigning for financial help from the British government because it claims it is facing an annual deficit of around $200 million as more U.K. homes switch to digital TV.