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Annual Report Annual Report 2015 Britain’s Creative Greenhouse A Year of Impact and Growth Channel Four Television Corporation Report and Financial Statements 2015 Channel Four Television Corporation Report and Financial Statements 2015 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 Printed by Park Communications on FSC® certified paper. Park is an EMAS certified CarbonNeutral® company and its Environmental Management System is certified to ISO14001. 100% of the inks used are vegetable oil based, 95% of press chemicals are recycled for further use and on average 99% of any waste associated with this production will be recycled. This document is printed on Heaven 42, a paper containing 100% virgin fibre sourced from well-managed, responsible, FSC® certified forests. Some pulp used in this product is bleached using an elemental chlorine free (ECF) process and some using a totally chlorine free (TCF) process. Channel 4 Annual Report 2015 Contents 03 Chair’s statement 04 Financial report and statements Contents Chief Executive’s statement 06 Strategic report 108 2015 at a glance 10 Report of the Members 119 Independent auditor’s report 121 Statement of Media Content Policy Corporate governance 123 The remit and model 12 Members 127 Investing in innovation 16 Audit Committee report 129 Making an impact 26 Members’ remuneration report 132 Spotlights 40 Consolidated income statement Our programmes 48 and statement of comprehensive Thank you 92 income 138 Awards 94 Consolidated statement of Forward look 102 changes in equity 139 Assurance report 106 Consolidated balance sheet 140 Consolidated cashflow statement 141 Group accounting policies 142 Notes to the consolidated financial statements 147 Programmes and the licence 172 Historical metrics 175 Historical record 177 Channel 4 Annual Report 2015 Chair’s statement 04 Chair’s Statement Charles Gurassa Chair annualreport.channel4.com My first few months as Chair of Channel 4 have underlined to me the unique role Channel 4 performs as a public service broadcaster. At its heart is its commitment to innovation, to creating new programmes, to reaching out to important and diverse audiences underserved by others, to stimulate debate and present alternative views and to be a platform for new talent from around the nation. Channel 4 Annual Report 2015 Chair’s statement 05 Its publisher/broadcaster model delivers As is publicly known, the Government Commercially, Channel 4 ended the year on a hundreds of millions of pounds of investment has stated it is reviewing options for the very sound footing with record revenues and into the independent creative sector in the UK, organisation’s future ownership and as I write particularly marked growth in digital related enabling the nations’ independent producers we await further news from that process. In income. This positions the business well for to grow and prosper in a highly competitive the meantime it is my responsibility as Chair the future, a view endorsed in two recent global market. to ensure the Board retains full focus on the external reports from EY and Enders Analysis1 fulfilment of Channel 4’s statutory functions. consistent with the report and findings of Most importantly it delivers this public service Ofcom when they renewed Channel 4’s licence at no cost to the public, its success in the This report demonstrates that Channel 4 for a further ten years in 2014. These two advertising market enables it to self-fund all its is performing strongly on both its public external reports looked at the organisation’s programming as well as invest prudently for the service remit and on its financial parameters. long-term financial sustainability against the future. The year just concluded has been one Channel 4 has met or exceeded all its specific background of a fast changing increasingly of good all round performance at the Channel, licence obligations; levels of news and current digital environment and both independently audience share for the main channel is up, affairs output, access services – including the concluded Channel 4 was well positioned there has been strong delivery of the remit and introduction of subtitling on iOS devices – and to meet the challenges ahead. the financial performance has resulted in a production targets for originated, independent surplus of £26 million, with £20 million of this and regional production. In addition the On arrival I have found Channel 4 in good allocated to the content reserve. Channel 4’s Channel measures and independently audits heart and good shape. Since arriving here healthy financial position will enable there to its performance across a number of quantative the Channel has won Channel of the Year, be more investment in both television and film and qualitative measures to assess its creative Media Sales Team of the Year, Advertiser of content in the year ahead as well as further output and the impact it makes. The results the Year, numerous Royal Television Society development of the All 4 digital on-demand underline the distinctive role Channel 4 plays awards, three Oscars and received 22 BAFTA platform. The Board will continue to review and in British broadcasting. From its in-depth nominations, reflecting the creative and vibrant consider carefully the appropriate balance of news and current affairs and peak-time culture of the organisation today. I would like investing to enhance future delivery of the remit documentaries to contemporary drama, to thank Lord Burns, our former Chair, for his and commercial performance whilst ensuring award winning films and risk taking comedy excellent stewardship over the last six years. prudent levels of reserves. the Channel continues to be an innovative, I would also like to thank Mark Price our contemporary and alternative voice. former Deputy Chair who stood down from the The environment in which the business Board in April 2016 to take up a new role as a operates continues to evolve at a rapid In reviewing performance, the Board has also government minister. My thanks to all my new pace, with changing viewing habits and the been mindful of the input from Ofcom and has colleagues on the Board at Channel 4 for their increasing importance of digital markets. consulted with Ofcom during the course of contribution and support over the last year and Channel 4 is responding to these challenges the preparation of this report. We have further most importantly to all the team at Channel 4 well. The launch of All 4 has delivered growth strengthened the process of engagement with whose hard work, dedication and creative in digital viewing audiences and growing Ofcom this year, with detailed discussions inspiration has made Channel 4 what it is today. engagement with young audiences with over between senior Executives of Channel 4 half of all 16–34-year-olds now registered and Ofcom earlier in the process. I am very much looking forward to working with All 4. Digital revenues are growing with all my new colleagues and our partners rapidly demonstrating that the capability to We note the endorsement given by Ofcom in building on that success. use more sophisticated data is working well in its five-yearly review of Channel 4’s public for Channel 4’s clients as well as its viewers. service duties last year. On the specific points 1 These reports are available online via the Channel 4 Channel 4 will continue to invest in its digital raised in response to last year’s report, and in press centre. and data strategy and in support of All 4 to particular regarding older children, international drive further growth in viewers, attract younger and diversity output and the reporting of the audiences and offer attractive and intelligent Channel’s activity in the Nations, the Board platforms for advertisers. is satisfied with the progress that has been made and will continue to monitor these areas carefully. Channel 4 Annual Report 2015 Chief Executive’s statement 06 Chief Executive’s Statement David Abraham Chief Executive annualreport.channel4.com Channel 4 exists to do things differently – from the kind of content we create to the way in which we go about our business. This report demonstrates that Channel 4 continues to have a significant impact on audiences and the UK’s creative sector. Channel 4 Annual Report 2015 Chief Executive’s statement 07 2015 was a year in which Channel 4 The programmes that we showcase in this In January 2016 we published the 360º spent a record £629 million on content as report such as Catastrophe, Murder Detectives Diversity Charter: One Year On report, which a whole. Working in partnership with a wide and Escape from ISIS, demonstrate that includes our performance against the 30 array of production companies across the Channel 4 is living true to the remit across commitments we set out in 2015 in our bid UK, £455 million was spent on originally our output. We deliver this remit through to lead the way in improving diversity on and commissioned TV, film and digital content, programmes at the heart of the schedule, off screen. While there remains more to do, which was another record. We generated from Channel 4 News, the UK’s only daily hour we made significant progress during the year record Corporation revenue of £979 million, long news programme that provides in-depth including hosting a milestone DIVERSE industry with Digital revenues growing by 30%. This political and foreign affairs coverage, to drama festival at Channel 4 in January. We are now performance stands us in very good stead to such as Humans that reflect on big societal looking forward to 2016 as the Year of Disability maintain levels of investment in content built questions of our time.
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