Freeview Launch Hits ITV Harder Than Expected

The success of the new digital terrestrial platform, Freeview, has hit ITV harder than expected and is hastening its loss of audience share, according to a report from influential broker, Morgan Stanley.

In its latest guidance note, the broker states that the new digital terrestrial platform is having a negative effect on ITV, which is losing out in Freeview homes to BBC1, BBC2, Channel Five and UK History.

According to Morgan Stanley, ITV1, ITN News, Sky News and Sky Sports News have either seen their audience share decline or remain static in digital terrestrial homes. This is significant as Freeview viewers are potentially valuable to advertisers given that they are relatively young, upmarket and well-educated.

ITV2 has performed well in Freeview homes in comparison to satellite homes. However, Morgan Stanley points out that ITV1’s relative weakness in Freeview homes outweighs any gains over at ITV2.

According to Morgan Stanley, ITV1’s weakness in Freeview homes will contribute to its advertising revenue declining by 1.9% in 2003. The broker also reiterates its bearish stance on ITV partners, Carlton and Granada. It cites ITV’s weaker than expected audience share, its slower recovery in the advertising market, the declining power ratio of ITV1 and the continued need to increase the annual programming investment.

Earlier this year Zenith Optimedia warned that ITV’s audiences could continue to decline during 2003 as Freeview becomes more popular (see ITV Could Lose Audiences To Freeview In 2003).

ITV: 020 7843 8000 www.itv.com

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