'Undervalued' Channel 4 to raise ad rates by 5%

by Nicola Clark, Marketing 21-Nov-06, 08:30

LONDON - Despite a struggling TV ad market, Channel 4 is seeking to increase its ad rates by 5% across all programming, on the grounds that the channel is undervalued.

The decision comes as Channel 4 faces mounting debts and a potential £100m funding gap. Speaking at the Royal Television Society conference earlier this year, Andy Duncan, C4's chief executive, said TV ad revenues are likely to fall by 6% to 7% this year.

The broadcaster also faces added pressure following Ofcom proposals to ban ads for food and drink high in fat, salt or sugar to children. According to Carat, 'The Simpsons' -- a key Channel 4 property that will be sponsored by Domino's until December -- is one of the highest-rated shows among under-16s, who make up 32% of its audience.

Channel 4 is also hampered because it does not own the rights to shows such as 'Deal or No Deal' and 'Big Brother', which are both owned by Endemol. Agencies say that if the broadcaster does not tackle its debt, it will lose more shows, like 'Lost', to Sky One.

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