Channel Four Television Corporation Report and Financial Statements 2020

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Channel Four Television Corporation Report and Financial Statements 2020 Channel Four Television Corporation Report and Financial Statements 2020 Emerging better together Channel Four Television Corporation Report and Financial Statements 2020 Incorporating the Statement of Media Content Policy Presented to Parliament pursuant to Paragraph 13(1) of Schedule 3 to the Broadcasting Act 1990 annualreport.channel4.com Please contact us via our website This publication is available at (channel4.com/corporate) if you’d like http://annualreport.channel4.com this in an alternative format such as This is a certified climate neutral print Braille, large print or audio. product for which carbon emissions have ©Channel Four Television Corporation been calculated and offset by supporting copyright 2021 recognised carbon offset projects. The The text of this document may be carbon offset projects are audited and reproduced free of charge in any format or certified according to international medium provided that it is reproduced standards and demonstrably reduce accurately and not in a misleading context. emissions. The climate neutral label includes a unique ID number specific to The material must be acknowledged as this product which can be tracked at Channel Four Television Corporation www.climatepartner.com, giving details copyright and the document title specified. of the carbon offsetting process including Where third-party material has been information on the emissions volume and identified, permission from the respective the carbon offset project being supported. copyright holder must be sought. Any enquiries related to this publication should be sent to us at Channel Four Television Corporation, Corporate Brand, 124 Horseferry Road, London SW1P 2TX. Contents Overview Chair’s Statement 4 Chief Executive’s Statement 8 Channel 4’s purpose 12 Channel 4’s vision 14 Covid-19: Channel 4’s response 20 Future4 22 2020 at a glance 24 Statement of Media Content Policy Remit performance Represent unheard voices 26 Challenge with purpose 46 Reinvent entertainment 60 Creative forward look 78 Metrics 82 Thank you 120 Awards 122 Independent Assurance Report 126 Financial Report and Statements Strategic Report Financial review and highlights 130 Our principal activities 133 Key performance indicators 134 People and corporate social responsibility 136 Risk management 141 Strategic and financial outlook and Viability Statement 147 Governance The Channel 4 Board 148 Report of the Members 152 Corporate governance 154 Audit Committee Report 162 Members’ Remuneration Report 166 Consolidated financial statements Independent auditor’s report 174 Primary financial statements 181 Group accounting policies 185 Notes to the consolidated financial statements 191 Additional information Channel 4 financial statements 212 Historical metrics 2016–2020 218 Historical record 220 3 The Covid-19 pandemic had a profound impact on many aspects of national life in 2020 and it continues to affect people across the UK in 2021. Channel 4’s year was likewise impacted with all of our people, places and production severely affected by the lockdown and ongoing social distancing requirements. Always creating positive change Channel Four Annual Report 2020 Chair’s Statement 4 Charles Gurassa Chair’s statement Our priority throughout this difficult crisis was to The Personal History of David Copperfield ensure we played our part in helping, supporting, informing and entertaining all the Nations and Regions of the UK. The Channel 4 team was focused on keeping the public up to date with the very latest information available, to explore, explain and challenge as events unrolled and reach out to every corner of the country and to all sectors of the community – one of our fundamental roles as a public service broadcaster. Strong performance Despite the restrictions of lockdown and the commercial constraints of reduced budgets, the organisation’s creative and operational response to the crisis was swift and effective. Audiences responded positively to our ‘spirit of the times’ programming, which saw our share of audience grow. In the second half of the year, our income bounced back rapidly and, together with our cost reduction initiatives, this enabled us to start reinvesting back in content, to pay back all furlough money received from government and to announce a record financial surplus of £74 million at year-end. Our revenues were resilient, and we finished the year down only Our Leeds-based social 5% on 2019. A special thanks is due to our partners in the business 4Studio has independent production sector who suffered badly as a result of cutbacks and restrictions but who, become the UK’s most together with our commissioning team, responded magnificently to the challenge and created new viewed social branded formats and compelling content that captured the content partner, amassing imagination of the millions of people stuck at home. Channel 4 continued to meet or exceed all of more than 29 million views its public remit metrics and to outperform for younger and diverse audiences. We are the clear across Facebook and leader as the channel that ‘caters for audiences Instagram alone. others don’t‘ and our commitment to inclusion and diversity is a central tenet of our strategy. As the last Charles Gurassa year has shown, there is still much work to be done in this area both in front of and behind the camera. Chair’s Statement 5 Chair’s Leeds National HQ statement continued Digital future However, it is Channel 4’s exceptional digital #StayAtHome campaign performance that stands out the most in 2020. All 4 – the UK’s biggest free streaming platform – achieved 1.25 billion streams during the year. With more than 250 million more views than in 2019, this is the biggest-ever increase in absolute terms, and the highest growth rate in percentage terms since 2010. Equally impressively within one year of its launch, our Leeds-based social business 4Studio has become the UK’s most viewed social branded content partner, amassing more than 29 million views across Facebook and Instagram alone – and across all social content, 4Studio achieved more than 11 billion views of our content. The launch of our Future4 strategy this year has put digital at its heart, to give the viewer the freedom to access great content when and where they want. This continued strong performance of All 4 is a good platform from which to build. Levelling up 4 All the UK continues apace with the opening of our new digital studios in Leeds last year and our new permanent headquarters due to open there later this year. 2020 also saw record highs in the percentage both of our spend and volume on commissions outside of London, a testament to our burgeoning partnership with the creative talent to be found all around the Nations and Regions. Channel Four Annual Report 2020 Chair’s Statement 6 A vital public service Public service broadcasters such as Channel 4 are the lifeblood of the UK’s creative industries and we recognise that we have an important role to play in the UK’s cultural and economic recovery post the pandemic and Brexit. We act as a catalyst and as a pioneer for innovation in digital, in stimulating the growth of the independent production sector and as a leading media and early stage accelerator – particularly outside of London and among smaller companies and freelancer talent. Against the background of the pandemic, the year saw a resurgence in demand for high-quality, reliable news content with viewing numbers up 25%. In an increasingly noisy and partisan world where’ fake news’ abounds, Channel 4’s news is consistently seen by the public as a highly trusted independent voice. Filmmakers experienced unprecedented challenges in 2020, yet despite the hostile working environment, Film4 continued to support, develop and produce acclaimed films. From the double Oscar winning The Father, starring Olivia Coleman and Anthony Hopkins, to the BAFTA- winning Rocks, directed by Sarah Gavron, and Armando Iannucci’s The Personal History of David Copperfield, it was an impressive and diverse slate from some of the best contemporary film makers. (Read more about Film4 on p42.) Investing in the future It has been an exceptionally challenging year in many We Need Your Butt campaign ways, with the organisation having to face up to the pandemic-induced headwinds of restrictions on production and a significant reduction in content investment. These were offset by our swift and imaginative response in creating new formats and revitalising old favourites which, together with weaker-than-anticipated competitor schedules and large lockdown audiences, enabled Channel 4 to emerge from this unprecedented volatility in rude health both creatively and financially. Our ability to respond rapidly to the changing circumstances throughout the year reflects well on the capabilities and agility of the organisation and its leadership. We enter 2021 in good shape, with a strengthened balance sheet and excellent creative momentum, but recognise that the broader environment continues to be highly unpredictable and will require continuous vigilance and adjustment to unforeseen events. What the unprecedented crisis in 2020 has The advertising amply demonstrated is that Channel 4 operates a business model that is flexible, competitive recovery helped us and resilient. What it has also underlined is our importance as a distinctive, trustworthy and authentic end the year with British voice. As global streamers jostle for a share of the UK market, and as audiences continue to fragment, Channel 4’s role as a public service a stronger balance broadcaster becomes more important than ever. Finally, I would like to thank all my sheet returning a colleagues at Channel 4 for the outstanding work they have contributed over the past 12 sizeable surplus of months. Often in the most difficult of personal circumstances, their energy, imagination and commitment have enabled Channel 4 to be ever present, contemporary and relevant for all the UK at a time when it mattered most. £74m 7 Dialling up and doubling down 2020 has shown decisively that Channel 4 is a vital and relevant force in UK public service media.
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