Channel 4 has announced that it will become the first UK broadcaster to distribute video programming on Spotify, as it continues to seek new revenue streams and build its brand among younger audiences.
Starting this week, Spotify users can stream content from Channel 4.0, the broadcaster’s digital-first platform aimed at 13- to 24-year-olds, including Minor Issues, Hear Me Out, and Secret Sauce.
Speaking at Channel 4’s annual report briefing on 21 May, chief operating officer Jonathan Allan said that the broadcaster will share ad revenue with Spotify, similar to how it operates on YouTube.
Allan added that Channel 4 now sells the advertising against its content on YouTube, and combines it with its streaming package, putting the broadcaster in control of the pricing and resulting in higher yields and CPMs.
‘The revenue growth from YouTube over the past few years has been significant,’ continued Allan. ‘It’s not as lucrative as streaming or linear — yet. But we’re working with YouTube on that.’
More important, said Allan, is that the revenue the broadcaster receives from streaming platforms is accretive. ‘We’ve done lots of modeling and all of the viewing on YouTube is non-cannibalistic,’ he said, ‘because we’re reaching a new audience in a new mode of viewing, and they wouldn’t have come to streaming or linear in place of that.’
Video podcast viewership in the UK has grown by over 95% year on year.
Alex Mahon, Channel 4’s outgoing CEO, said: ‘If you’re over 25, you listen to a podcast; if you’re under 25, you watch a video. There’s a demographic shift where young people just want to watch video, even if it’s something designed for audio, and Spotify’s taking advantage of that. So it makes sense for us to be on that platform, because it’s young consumers, and that’s why we started with [content from] Channel 4.0.’
Richard Kirk, CSO at Essencemediacom, argued on LinkedIn that the broadcaster is ‘following the migration route news publishers have already made’, moving away from a ‘monolithic owned channel where all content is kept, to being an originator of quality content across as many platforms as possible.’
According to the executives, Channel 4’s content distribution strategy is designed to build brand and awareness among younger viewers. It’s not about luring people onto its own platforms — not immediately, anyway. Once users are on a platform, they’re not usually in the mood to switch right away, opined Allan. But the broadcaster discovered with reality show Virgin Island that social media is vital for building awareness of shows among young people, and that this does then boost the ratings.
Channel 4 used its annual report briefing in London to announce that, following the enactment of the Media Act 2024, the broadcaster will take advantage of the new opportunity to produce in-house and own intellectual property.
Allan described it as ‘a huge change in our potential business model and one that we believe is essential for the long term sustainability of Channel 4’. But he added that the move would be carefully managed, and that its initial scale would not ‘disrupt the market nor will it change how we commission [shows].’
Channel 4 will form a small in-house team that will focus on developing returnable and scalable formats with global potential, in particular within factual entertainment, entertainment, and reality.
It will also establish a new creative investment fund, to build majority stakes in independents that it believes have strong commercial potential.
