(C4) Abraham defies the gloom: Things are shaping up quite nicely
Channel 4’s chief executive David Abraham is curiously upbeat about the broadcaster’s prospects for 2012, thanks in no small part to what he considers to be “very successful deals with all the major agencies” secured this trading period.
It was a bullish Abraham who spoke at the Oxford Media Convention this week, despite the ongoing uncertainty in the wider economy and admitting he expects to report Channel 4’s first deficit in more than a decade for this year.
On the back of reporting annual profits of £40m last May, Abraham said he is preparing to dip into “transitional reserves” to invest in the future. He explained: “By using surpluses built up over the last few years, we are able to smooth our investment into 2012 and beyond.
“We want to grow Channel 4 and we want to grow the UK creative economy. To do that we need to invest and, as every entrepreneur knows, ‘you need to put down in order to pick up’.”
And so in a breath, the messy business of improving the books is consigned to the back burner for the next 12 months, in favour of a bold investment strategy you have to admire.
The piggy bank is being raided to free-up money to spend on UK content. Channel 4’s UK budget is set to increase from an estimated £400m in 2011 to nearly £450m in 2012.
Questions over “actual growth” in investment aside, it’s a move that has to be welcomed by UK indies and TV viewers alike in the current climate. It represents the highest investment in home grown content in Channel 4′s 30 year history, and – in case the point was missed Chancellor Osborne – Abraham spelt out it’s implications:
“This means that, since I joined Channel 4, we will have increased the annual level of investment in the British creative economy by over £80m – and across a wide spread of companies, both large and small, and throughout the UK.
“It means jobs for British companies, especially the critical SMEs. And it means the creation of IP, which indies can use to generate additional export revenue, further boosting the UK economy.”
Creative output, led by Jay Hunt, will be based on “innovation, diversity and seeing the modern world in new ways”, or, for want of a soundbyte, “Mission with Mischief”, some of which has been covered here.
But as we know, it’s not just Channel 4’s content that has undergone a major overhaul in recent months. The high-level departures of Mick Perry, Mike Parker, David Charlesworth and Errol Baran, has left a newly restructured commercial team, led by Jonathan Allan, with much to prove. For many, a C4 without Andy Barnes feels like a Clear Channel without an Atkinson: different. But I guess that’s the point.
One person already suitably impressed is boss Abraham. Mapping out the broadcaster’s outlook in Oxford, he said: “Most importantly for 2012, our new director of sales Jonathan Allan has concluded very successful deals with all the major agencies, who are really embracing the thinking and the sharing of information that we’re starting to bring into these conversations.”
Seems like the main channel’s slight dip in share to 6.8%, and loss of 16-34 year olds post Big Brother, has not been enough to prevent JA’s former agency peers buying into the new vision. His case would have been helped by a slight rise across the portfolio, which includes Film4, E4 and More4.
Morale in Allan’s team also received a timely boost when it topped the £100m mark in ad revenue in November, a record for C4 in a single month. Meanwhile, the broadcaster’s partnership with UKTV continues to pay dividends and PBS has been added to the commercial portfolio too.
Meanwhile, explosions in social media and second screen opportunities are credited with helping to increase the “discoverability and the magnetism” of C4 content, and ongoing investment in data capture should form the bedrock of better ad targeting in the future.
“Things are shaping-up quite nicely for 2012,” announced Abraham – maybe he’s right.