Digital channels help C4 break even

Programme costs for the core C4 channel increased more rapidly than revenues, by£20.8m or 4% to£536.5m (£515.7m, 2006). This led to the core channel recording an operating loss of£7.8m, its first annual deficit since 1992.

But the digital TV channels were collectively in the black for the first time, returning an operating profit of£16.2m against a loss of£17.6m in 2006. This helped the Channel 4 Group return a pre-tax surplus of£1.6m compare to a£21.3m in 2006.

The broadcaster used the publication of its annual report for 2007 to step up its campaign for a new funding model to secure its future as a public service broadcaster.

Chairman Luke Johnson said: “2007 will be the last year in which Channel 4, under its current funding model, manages the difficult balance between increased creative investment and financial break-even.

“The tipping point we have been warning about has been reached, with the core channel now in deficit and being supported by profits from secondary activities.

“A new public funding solution is now urgently required if we are to maintain such impressive levels of public service plurality in competition with the BBC.”

Spending on content across the group in the financial year to 31 December 2007 rose 3% to an historic high of£624m (£608m, 2006). More than£400m was invested in commissioning original UK content, with the lion's share being spent with UK-based independent producers, 312 of whom supplied content during the year.

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