INSIGHTanalysis: ITV1 Share Further Eroded In 2002

ITV1’s average share of all TV viewing was 24.1% in 2002, down from 26.7% in 2001. Its primary rival, BBC1, saw its share fall by 0.7% points, from 26.8% to 26.1%. Channels other than the main five saw their combined share continue to rise, up to 22.1% in 2002, from 19.6% a year earlier.

Multi-channel erodes mass channels The multi-channel sector has been eating into the mass channels’ share of viewing for many years now, giving ITV1 and BBC1 a battle not only with each other, but also with the burgeoning selection of entertainment channels.

At the current rate of growth, the combined multi-channel sector will soon overtake the shares of BBC1 and ITV1. The long-term trends shown in the graph here, illustrate how ITV1 has been dealt a heavier blow by the rise of multi-channel than BBC1, starting, as it did, from a high audience share base.

UK Television Viewing Share Trends
Station	1992	1993	1994	1995	1996	1997	1998	1999	2000	2001	2002
BBC1	33.7	32.7	32.3	32.2	32.6	30.8	29.4	28.4	27.1	26.9	26.2
BBC2	10.5	10.3	10.6	11.2	11.6	11.6	11.3	10.8	10.8	11.1	11.4
ITV 1	40.8	39.9	39.5	37.2	35.1	32.9	31.7	31.2	29.2	26.7	24.1
Channel 4/S4C	10.1	11.0	10.8	10.9	10.8	10.6	10.4	10.3	10.5	10.0	10.0
Channel 5						2.9	4.3	5.4	5.7	5.8	6.3
Others	4.8	6.1	6.8	8.5	10.0	11.8	12.9	14.0	16.6	19.6	22.1
Source: BARB/MediaTel.co.uk

Since 1992, ITV’s share of viewing has fallen from 40.8%, against BBC1’s 33.7%, to just 24.1% in 2002. In 2001, ITV dropped below BBC1’s total annual share for the first time. ITV1’s rate of decline has been steeper than BBC1’s since around 1999 and this looks set to continue.

BBC2 and Channel 4, for their part, are largely impervious to the rise of multi-channel, with both their shares of viewing hovering just over the 10% mark for the last ten years. This is perhaps because multi-channel stations are typically targeting the mass-market audience, which ITV1 also serves, whilst BBC2 and C4 follow an artier, more alternative public service mandate.

ITV boosts programme budget ITV yesterday pledged to substantially increase its investment in peak-time drama programming, in an attempt to stem the losses to its viewership. In its annual statement of programme policy, the Network said that the programming budget would be increased from 2002’s £750 million to £830 million this year.

These moves come amidst falling advertising revenues, which have put the squeeze on commissioning budgets. The latest predictions from Merrill Lynch put ITV’s revenue down by 5.2% in February and by 10.0% in March. This is a weak start to the year and comes at a time when advertising is supposedly showing some gentle improvement. Growth is not expected to return until September and even then it is extremely slight, at just 1.0%.

ITV Advertising Growth Trends And Forecasts
	January	February	March	April	May	June	July	August	September	October	November	December	Total
2002	-16.0	-16.8	-7.1	-11.6	9.4	10.7	3.9	7.3	1.9	10.1	3.2	-4.1	-1.0
2003	-2.0	-5.2	-10.0	-1.0	-3.0	-6.0	-1.0	-4.5	1.0	-2.5	1.0	3.0	-2.5
2004	3.6	3.6	3.6	3.6	3.6	3.6	3.6	3.6	3.6	3.6	3.6	3.6	3.6
Source: Merrill Lynch estimates, January 2003