ITV Revenues Drop As Audiences Improve

ITV airtime revenue could be down by as much as 10% year on year in February and March, according to estimates from Merrill Lynch analysts. The dip is partly due to advertisers’ reluctance to spend whilst there are large uncertainties over the short-term future of consumer spend. However, the ‘great irony’, as Merrill points out, is that ITV’s viewing figures are actually doing too well.

Compared to the poor viewing figures of Q1 2002, ratings are well up year on year. This means that advertisers need fewer spots in order to achieve their ratings targets; they are therefore spending less. “In a fixed supply medium, this reduces marginal demand,” say analysts.

The broker is now downgrading its 2003 ITV growth forecast from -0.7% to -2.5%. As a result the overall UK TV forecast falls from 3.3% to 2.2%. For the year to September, ITV predictions are reduced from -0.6% to -1.8%.

The Network’s share of TV advertising is forecast to drop from 53.7% in 2002 to 51.2% in 2003, edging ever towards that crucial 50% mark. If Carlton and Granada do not control more than half of UK TV airtime revenue then their case for a merger is more likely to be passed by regulators

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