20 March 2024 , 12:09
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In a bid to grow commercial revenues from within the business sector, Channel 4 has launched a new initiative called Untapped.
The initiative will see the broadcaster invest millions of pounds worth of advertising in underrepresented and overlooked business founders. This move comes amidst concerns about a decline in TV advertising revenue.
However, Channel 4 Ventures, the broadcaster's investment arm, believes that Untapped is the first of its kind within the industry. The initiative will use a new framework to assess the profiles of founders across various criteria, including gender, education, socioeconomic background, race, employment history, and location.
This framework aims to identify and support founders who have traditionally faced barriers in accessing funding and support. Analysis by Channel 4 Ventures revealed that founders securing significant investment have been predominantly men from top universities.
Untapped will use a media-for-equity model, offering start-ups advertising space on Channel 4's TV and streaming platform in exchange for an equity stake in the company. Currently, Channel 4 Ventures has about 20 active investments worth £45 million.
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The company emphasized that it is not setting a specific target for working with founders from underrepresented backgrounds to avoid a "token" approach. However, the proportion of investment could range between 10% and 60%, amounting to millions of pounds worth of advertising space.
Verica Djurdjevic, the chief revenue officer at Channel 4, has said that TV advertising is still "very appealing" for businesses looking to grow and get a good return on their investment. She explained: "While audience behaviours are shifting and we're seeing some decline, actually the mass reach available within linear TV advertising is incomparable to other media channels,".
This comes after Alex Mahon, Channel 4's chief executive, warned last month of a "sharp and protracted advertising slowdown that has hit the whole industry", as the channel planned a new wave of job cuts. Channel 4 said it wants to start making more money from digital advertising revenues as part of a plan to grow its streaming services.
Channel 4 Ventures has supported companies like Oddbox, Pinterest and Carwow since it started eight years ago, and puts the returns it makes back into Channel 4. At the same time, its study of the profiles of hundreds of entrepreneurs who have secured a valuation of more than £100 million for their business found that they come from a narrow section of society.
It found that 94% of founders were men, even though men makeup 41% of all UK graduates. The founders were 51 times more likely to have graduated from an Oxbridge university or US equivalent than from a university outside the top 100 globally.
And they were ten times more likely to be a white university graduate than a black graduate, the study showed. Vinay Solanki, the boss of Channel 4 Ventures, said: "The data implies that a wide range of talented founders leading attractive commercial organisations are being overlooked by the current ecosystem and we are committed to identifying and backing them."
"More broadly, Untapped can be a catalyst to grow the UK consumer investment landscape and encourage others to follow in the investment space."