2024-01-29 12:09:23
The double blade of the shift in audiovisual consumption towards digital, to the detriment of linear, and the slowdown in the advertising market is starting to do serious damage across the Channel. After the Sky group last year, it is Channel 4’s turn to prepare for substantial cuts in its workforce.
According to information from Sky News confirmed by other British media, Channel 4 must announce to its employees at the start of the week the elimination of 200 to 250 positions, or around 15% of its workforce of around 1,300 employees. Such a plan would be on an unprecedented scale, potentially greater than that of 2008, when the British public broadcaster cut 200 jobs in the wake of the financial crisis.
Faced like other players in traditional television with competition from platforms and changing uses, the broadcaster, created in 1982 and whose resources depend two-thirds on linear advertising, must deal with the sudden slowdown in this market.
Advertising “market shock”
Last November, its CEO, Alex Mahon, told the House of Commons that he expected an 8 to 9% drop in advertising revenue in 2023 and predicted a 14% fall in the traditional television advertising market, which is expected to put Channel 4 in the red for the next two years. Alex Mahon also indicated that the group might need to use an emergency credit of 75 million pounds (88 million euros) to compensate for the fall in revenue.
“We have entered what I would call ‘market shock’ territory,” she commented at the time, indicating that we had to go back to the 2008 recession to find a greater decline in the advertising market. “No one had envisaged such a fall,” confirms Gill Hind, director of the television department at Enders Analysis.
According to the “Guardian”, the company, which had experienced an expansion in its workforce in recent years, has already made cuts in its programming budget of 713 million pounds (in 2022), by canceling, postponing or pausing certain projects. Last year, the British government considered privatizing the channel before abandoning it.
Prepare for the future
“We face an extremely uncertain economy in the short term and the need to accelerate our transformation to become a fully-fledged digital public service broadcaster in the long term,” a Channel 4 spokesperson told the Guardian. ” early January. As a result, we must continue to divest in our linear chain businesses and simplify our operations in order to become a more efficient organization. »
“Channel 4 has been heavily impacted by the constraints of its advertising-dependent business model, at a time when the main SVOD services are all on the offensive to promote their offering with advertising, in direct competition with the heart of what generates revenue for Channel 4,” observes Tim Mulligan, co-founder of MIDiA Research.
By cutting costs, “Channel 4 is doing the right thing and is being pragmatic and proactive in preparing for the future,” says Gill Hind. “They are not alone in this case,” she adds, referring to the “recalibration” of the media sector in the broad sense, also affecting streaming players like Paramount, which recently announced plans to cut content. positions.
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