BoAML: ITV advertising forecasts improve but will still be negative for 2013

Bank of America Merrill Lynch (BoAML) forecast a decline in ITV’s share of commercial impacts (SOCI) but ITV still believe it will not impact on its advertising share in 2013. However, the bank maintains that ITV will see a decline in share.

The latest analyst report comments that ITV will re-invest some of its sports savings to support viewing. The bank is forecasting a TV advertising market decline of 1.5% in 2013 and a 2.6% decline for ITV (-4% previously).

BoAML believes that advertising expectations for 2012/2013 were too high and says ITV is yet to deliver a hit show or format. It also expects studio profits to be in excess of £100 million, up £5 million on previous forecasts.

Newsline reported yesterday that ITV had delivered a better than expected Q3 driven by ITV studios.

There is now an expectation that increased competition could be positive for ITV, with Over-The-Top (broadband delivery) driving increased competition in the pay TV market. The bank states that this is expected to become an increasingly important advertising category in the coming months. Likewise, OTT also opens up strategic opportunities for ITV to better monetise its content and channels.