Viacom's Channel 5 Operating Profit Drops Amid Original Programming Push
The network highlights a growing upmarket audience and says it will continue to spend more on original content after the cancellation of 'Big Brother.'
Viacom's Channel 5 in the U.K. reported an 11 percent decline in its full-year operating profit amid a slight revenue drop and increased investment in original programming, which will continue after the cancellation of long-running reality TV show Big Brother.
The company posted an operating profit for the fiscal year ended Sept. 30 of £39.9 million ($49.7 million), down from £45.0 million in the previous fiscal year. The decline "in part reflects a decision by management to increase spend on U.K. original programming by 2 percent despite a decrease in turnover," the company said. It also said this was its fourth consecutive annual profit, a first since Channel 5’s launch in 1997.
Full-year revenue fell less than 1 percent to £376.3 million ($469.0 million) from £379.7 million.
"Channel 5 delivered a record-breaking year for upmarket viewers during the 12 months," the company said in a regulatory filing. The upmarket audience reached 41 percent of the channel's overall audience. As drivers behind this, Channel 5 cited such commissions as Michael Palin in North Korea, Inside the Tower of London and Secrets of the National Trust.
"A fourth consecutive year of increased investment in U.K. original programming across its portfolio of channels has fueled Channel 5’s creative evolution and driven this ratings success and critical acclaim," the company said.
It reiterated that a recent push into original drama would help the network further, saying: "Channel 5 added homegrown drama to its slate of original commissions and has signaled plans to invest in an even greater breadth of original programming with budget freed up by the cancellation of long-running reality series Big Brother."