ITV Reaches A New Low With Old Habits Says Billetts
ITV has reached a “new low” by reverting back to its old habit of increasing revenues while haemorrhaging audiences, according to a wide-ranging new report into the state of the commercial television market from media management consultancy Billetts.
The Billets Half Term Report reveals a poor performance for the UK’s largest commercial broadcaster, which has suffered a 2% year on year dip in individuals, with the key audiences of ABC1 Men and 16-34 Adults dropping by 5% and 6% respectively during the same period.
ITV’s revenue share also dropped below 50% for the first time in the company’s history as advertisers sought better value for their marketing budgets on rival channels in the first six months of this year. This came in spite of a strong performance for the broadcaster’s programming, with I’m A Celebrity Get Me Out Of Here providing a particular boost to ITV’s audience of Housewives with Children.
However, despite the relatively good performance of programmes like Footballer’s Wives and Hell’s Kitchen, not to mention highly successful coverage of the Euro 2004 football tournament, ITV could still face a 3% to 4% decline in audience share across the whole of 2004.
Billetts claims that the dip in share could translate to a £60 million shortfall in ITV’s revenue next year, as the terms of the contract rights renewal, which is intended to limit ITV’s dominance in the market for airtime sales, connects revenue share to the broadcaster’s audience loss.
However, the dark cloud settling itself over ITV appears to have a silver lining in the shape of ITV2. The digital channel has seen “spectacular growth”, expanding in line with the Freeview platform on which it is carried to become the second most popular non-terrestrial channel in digital homes.
ITV’s target is to triple its multi-channel revenues by 2007, a goal that looks set to be reached, as the broadcaster has boosted its production budget to £48 million, as well as setting aside £12 million for its new ITV3 channel, aimed at mature viewers with a mix of drama and light comedy (see ITV Reveals Plans To Launch Range Of New Channels).
Billets also reveals a strong performance for Channel 4 this year, with revenues rising by a respectable 5% as the broadcaster secured a 19.8% share of advertising revenue. Billetts acknowledges Channel 4’s performance in the face of similar pressures to ITV, but accredits the increases to the channel’s strong audience of ABC1 Adults and 16-34 Adults, which have risen by 9% following successful runs of shows such as Big Brother and Ramsey’s Kitchen Nightmares.
Five continues to perform well, notching up a 7% rise in revenues and a 6% increase in its audience share. Billetts states that the broadcaster’s performance is likely to be boosted by the popularity of Freeview, which side-steps the channel’s regional reception problems, to make Five the only terrestrial channel to gain viewers when a home switches to digital television.
Continuing to feed viewers a diet of American imports has paid off for Five, as has the station’s screening of Hollywood blockbusters Independence Day, The Horse Whisperer and Mercury Rising. In addition, Five has made a good effort to expand the variety of its programming, shying away from its once synonymous staple of ‘football, films and fucking’ to screen more history, science and educational programming to underpin audience growth.
Digital satellite superpower, BSkyB, was also praised by Billetts after the broadcaster saw profits grow by 75% year on year. However, the company will need to increase its subscriber figures in order to keep investors happy following a 20% reduction in its share value as the broadcaster fell short of its own subscription targets (see Sky Profits Rocket Despite Slowing Subscriber Rates).
From an advertising perspective, Sky continues to perform well, with revenues for the first six months of 2004 up by 12%. However, audiences of 16-34 Adults has slipped by 5% year on year and, more alarmingly, Sky One has suffered a huge loss of 23% amongst the same audience and a whopping 20% decline in the number of Housewives with Kids watching.
Sky One’s audience share amongst satellite channels has also taken a battering, slipping to 11% in 2004 from a once dominant 25% in 1999. Billetts claims that too little original programming, coupled with a lack of ‘must see’ events is the root of the broadcaster’s troubles.
Earlier this week Sky handed control of its beleaguered music channels, Flaunt, Scuzz and The Amp, to rival operator Chart Show Channels following a wide-ranging review of their performance. The move followed a comment by Sky Networks managing director, Dawn Airey, at this year’s Edinburgh International Television Festival denying that the stations would be closed (see Sky Hands Over Music Channels But Keeps Advertising Sales).
Billetts: 020 7321 4000 www.billetts.com
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