Channel 4 Doesn’t Rule Out Subsidiary Flotation

Channel 4 is “open to the possibility” of creating subsidiaries which could be floated on the stock market in future, although the idea of full flotation has once again been rejected by the board individually and as a whole (see Channel Four Chief Calls For Abolition Of BBC Board Of Governors). Speaking at the presentation of the channel’s 1999 Report and Financial Statement, chief executive Michael Jackson said the flotation of subsidiaries could even be a possibility in his time, if funds were needed to continue the Channel’s plans.

Part of these plans will involve diversification into digital television and the internet. Chairman Vanni Treves said that he thought the rise of multi-channel television would dilute quality across the industry and that Channel 4 had to be aware of this and capitalise on its strengths.

Mr Treves stressed that one of the Channel’s strengths was its ability to make “decisions driven by cultural, not financial imperatives.” In 1999 this policy seems to have paid off, with pre-tax profit at £46m, and advertising and sponsorship revenue increased by 7% to £600m. Channel 4 has also held onto its 10% audience share, where others have suffered losses.

Despite a net loss of £20m last year for Film Four , Channel 4 points out that the channel now has 300,000 subscribers and is confident that it is on track to break even by 2003. This cable and satellite venture will by then have been joined by two more non-terrestrial ventures – E4 and an interactive racing channel.

Entertainment channel E4 is due to launch “on the cusp of the year” to the majority of digital viewers. Around £100m has been invested in the channel which will carry popular shows such as Friends and ER and original content which will cross-over with the terrestrial channel. The channel is set to have interactive elements for both programming and advertising, with Channel 4 saying it is keen to experiment with creating “a sense of community with viewers”. It is thought that E4 would be included in the basic packages, and talks are said to be in progress with carriers and possible partners, with all platforms involved.

Also launching before the end of the year, The Racing Channel will be a venture undertaken in partnership with the BBC and NTL. Another interactive channel, it will offer on-line betting and if current negotiations are successful, will show racing from all 12 major UK race courses as well as all the others. Available to UK and overseas viewers, it may start as a pay channel, but it is hoped it will end up in basic packages.

Channel 4 invested £2.5m in new media projects last year, and hopes to quadruple that figure this year. Pointing to the success of education site www.homeworkhigh.com, which attracted 1.8m hits last week, the board members confirmed the launch of its next venture, an as-yet-unnamed dedicated gay portal, this summer.

The executives would not be drawn on whether more new channels were on the cards in future. “We’re busy at the moment.” said Vanni Treves. “I expect we’ll draw breath and the see what’s next.”

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