Channel 4 facing ‘market shock territory’
Anyone working in TV knows that commissioning and budgets have plummeted in the past year. The entire industry has been affected by it, many having to go into survival mode and or seeking money from the international markets, writes Tessa Laws (right).
Earlier this year, Enders Analysis predicted that there would be a 5% fall in TV ad spend in 2023, compared with last year.
Statista forecasted that TV ad spend was expected to decrease by 2% in 2023 (BVOD forecast to grow by 3.6%).
Therefore, it comes as no surprise to hear that Channel 4 has been significantly impacted.
This week Alex Mahon (left), CEO of Channel 4, told a committee of MPs that the broadcaster was facing ‘market shock territory’.
C4 had expected 2023 to be tough but had hoped for recovery in Q3 and Q4 which did not happen.
As a result, C4 will have a deficit this year and Mahon confirmed they will need to use a debt facility, marking the first time Channel 4 has relied on its £75m financial backstop.
The only other time there’s been this level of decline, was in the 2008 recession, she said.
ITV also warned of the worst market in advertising for more than 15 years.
C4 has cut back its spending on new productions due to the slump, making it even harder for producers in the UK.
The timing is interesting given the new UK Media Bill, currently going through Parliament which could ensure that for the first time in its 40 year existence C4 can produce and own all IP in its own productions. Its worth noting Channel 4 doesn’t want this, and frankly as a champion of the independent TV sector, this looks like a move that will diminish rather than support indies.
Either way finding new ways of financing content to be made is at the forefront of every production company’s mind.
Which is why we anticipate a growth in branded content – driven by producers in desperate need of cash and part driven by the brands that look for ways to best deploy their marketing budgets at a time when spend is dropping.
Any brand wants audiences to be able to consume its content across as many formats as possible. There are of course a raft of compliance issues that will have to be ironed out when it comes to branded content in British TV, but once they are, the value of this funding will be indisputable.
With economic adversity comes many problems, but hopefully innovation too. And perhaps we will get to see further unique brand and production partnerships that will help put money back into the sector along with making some engaging programmes too.
Look out for updates on our 2024 branded content event on our site and socials – details and speakers coming soon.
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