Google ad revenues surpass Channel 4's

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LONDON -- Channel 4 chief executive Andy Duncan on Wednesday warned that broadcasters face "deep structural" changes in the advertising market after revealing that U.K. ad revenues for Google will exceed those of Channel 4's for the first time ever this year.

In an interview with the Financial Times, Duncan revealed that the pubcaster will report advertising revenues in the region of £800 million ($1.5 billion) in 2006, compared to the £900 million ($1.7 billion) in U.K. revenues expected by the Internet search giant -- which the U.K.'s Internet Advertising Bureau says accounts for roughly half the U.K. online advertising market.

"People need to wake up and realize that this is not just a cyclical issue. There is deep structural change taking place," Duncan told the newspaper, suggesting parallels between the transition of advertising from broadcast television to the Web and warning that the TV industry cannot afford to be "in denial" about the changes.

"If we want to protect the fantastic legacy of U.K. broadcasting, we need to wake up to this sooner rather than later," he said.

Channel 4 relies on advertising revenue for the bulk of its income, and under Duncan it has switched its strategy for its digital channels from subscription-based revenues to an advertising-only model.

But he also has called on the government for indirect subsidies for the channel, which he warns faces major problems over the next decade.

U.K. media regulator Ofcom is currently midway through a review of Channel 4's role and remit, and will address the channel's possible future funding issues in a report expected early next year.
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