Billetts’ Outlook For The UK Television Sector
Billetts, the advertising and marketing consultancy, has compiled an overview of the UK television industry’s first half of the year, including speculation on how the remainder of 2002 may pan out. Here are some of the key assessments of the year so far, broken down by broadcasting group.
ITV1 Despite a boost in advertising surrounding the World Cup in June and July, ITV1 has again seen the largest revenue erosion of all the commercial stations, dropping 6% from 2001 against a market decline of 1%. Accordingly, its revenue share has fallen from 56% in 2001 to just 54% in the first half. However, Billetts says that given ITV1’s audience declines, this must go down as a satisfactory performance.
ITV1’s share of Adult impacts has fallen to less than 50% against the BBC and strong performances from other commercial stations. ITV’s Adult audience share has now fallen by 7% points. ITV1 also continues to rapidly lose younger viewers, with a 23% decrease in 16-34 Adult audiences, leaving its 16-34 share at an all-time low of 36%.
BARB data, sourced from MediaTel.co.uk, shows the sharp downward trend in ITV1’s share of viewing, as indicated in the trend line on the following graph.
The Network’s share of all Adults viewing has fallen from 29.6% in June 2000 to 23.9% in June 2002. The trendline for BBC1, meanwhile, shows virtually no decline on average over the two year period (although BBC1’s average is boosted considerably by strong World Cup viewing in June this year).
Billetts says that this fall in viewers has caused ITV1’s Adult price premium to rise once again – to +24% from +11% last year. This has hit 16-34 Adult advertisers hard again, with cost inflation in excess of 20% and a price premium of over 50% against the market average (which includes ITV).
The report says that ITV1’s cost inflation may be helped if the ‘impressive’ autumn schedule delivers the audiences that are hoped for.
Channel 4 Channel 4’s impacts have been up and down and at one point the station looked liked it might be squeezed out of the picture somewhat by satellite and Channel 5 on one side and ITV1 on the other. However, Big Brother 3 and Graham Norton help put audiences back up to speed.
This has helped price competitiveness against ITV1 across all audiences, with the key 16-34 price notching up only 6% with the television market, says Billetts.
Channel 5 Channel 5 has consolidated a good finish to 2001 with a successful start to 2002, says the review. Revenue at the station was up 17%, easily outpacing the broader market.
The improvement in programming has seen Channel 5’s Adult audiences increase by 17%; 16-34 audiences are up by 9% and ABC1 share up an impressive 18%.
Previously, Channel 5’s profile has often been in the spotlight for the wrong reasons but across 2002 there are signs that this is gradually changing with a more female-friendly, upmarket skew than in 2001, says Billetts.
Despite the impressive revenue growth, Channel 5 remains extremely cost-effective, with prices decreasing on all audiences against the ITV benchmark. However, the next six months could prove critical for Channel 5, when we will be comparing audiences year-on-year without the impact of Home & Away.
A comparison of costs per thousand (CPT) trends on the three main terrestrial stations is shown in the chart below.
BSkyB As with Channel 5, Sky is defying the advertising recession, with revenue growth of 14%. Sky’s share of non-terrestrial viewing (which fell last year to a low of 33%) has increased to 43% in 2002.
In 2001, Billetts’ criticised Sky for being more expensive than ITV1. This year, the satellite broadcaster has experienced the largest cost-deflation of all the commercial channels. Sky’s Adult price premium has dropped from 47% above the market last year, to 5% below.
Outlook The impact of Digital TV continues to grow, says Billetts. Sky’s dominance of the consumer market was demonstrated in its latest subscriber figures, which saw the customer base rise more than 200,000 to 6.1 million. Freeview – the digital terrestrial partnership with the BBC – is in with a chance; Sky is not doing much wrong at the moment, lauds the report.
“Channel Four needs to take stock of its evolving positioning and prepare future programming carefully now its new management structure is in place. All eyes will be on Channel 5 to see if viewers continue to respond to its more ‘worthy’ output.
As advertisers come under even more pressure for guaranteed returns, media owners will be under more pressure to deliver accountable solutions,” concludes the review.
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