Between Netflix supposedly investing $6 billion in original content next year, ITV unveiling its 2017 programming at this month’s star-studded Gala, and Channel 4 promising a revamp of its on-demand platform at its own Upfronts, there’s been a quiet success story in the TV industry this year. In the 12 months to the end of September, Channel 5 recorded a £58.4m profit – the first consecutive year of profitability in its 20 year history, even without Richard Desmond at the helm.
Between October 2015 and September 2016, the channel saw a huge 19% increase in turnover to £383.6m. This coincides with a 9% increase in younger viewership.
David Lynn, the UK, Northern and Eastern Europe President for Viacom, which bought Channel 5 in 2014, said the broadcaster was now “sustainably profitable” for the first time, thanks to the radical approach taken by the American ownership.
Lynn suggested the success was “driven by original British content. We’ve transformed the business model through our advertising partnership with Sky Media and by getting Channel 5 to work more closely with our pay TV channels, making it sustainably profitable for the first time, in spite of recent economic uncertainty”.
Only seven of the shows on air in 2013 are still broadcasting today. Channel 5 is aiming to dedicate two thirds of its schedule towards home-grown content by the end of this year, giving the channel a fresh feel as well as look. This has already led to the commissioning of comedy series Borderline, the UK version of the popular Lip Sync Battle, and factual-entertainment series Ben Fogle: New Lives in the Wild and The Yorkshire Vet.
This fresh new approach has come at a cost – £230m, to be exact. The broadcaster has increased its spend on programming by 11%, including the purchase of The X-Files, the first new series of the hit show in thirteen years, which drove the biggest ever audience for a drama on Channel 5.
The bulk of Channel 5’s income comes from its advertising revenue, which has contributed to the increase in profit, along with outsourcing the sales operation to Sky Media. This not only cut overheads, but meant it can profit from selling inventory secured with the ratings growth.
Online viewing also increased on Channel 5 this year via its rebranded My5 player, delivering an 18% year-on-year increase in streams. A My5 linear TV channel was also launched in August, replacing a time-shifted channel with different programming attracting a larger audience.
With Viacom rejuvenating Channel 5 to become a solid, profitable television brand, advertisers are starting to acknowledge the power of the channel’s station portfolio. The channel is now providing a platform to talk to younger viewers and build reach. What’s more, up against the giants of Sky and Netflix, Channel 5 has proved the success of British broadcasting along the way, rather than relying entirely on American imports.