IPA Report On Channel 5

Channel 5 could attract around £40m in ad revenue in 1994 (when it launches), increasing to £325m by 2003 (at constant 1989 prices) according to the results of the IPA’s study into the financial viability of Channel 5. If Channel 5 does achieve these targets these figures would represent an estimated 2% share of total UK TV ad revenue in 1994, rising to in excess of 10% in 2003. The report assumes that TV share of total advertising will grow from a current level of around 30% to 38% in 2003 as a result of the new opportunities from satellite, cable and Channel 5

It is estimated that Channel 5 will launch in 1994 with 35% of all TV homes falling within the transmission area of the channel, rising to 60% by 1996. The IPA feels that for Channel 5 to survive in a more competitive commercial TV environment in 1994 and beyond it will need to provide programming that is new and different to the fare that is currently available. The IPA suggests that Channel 5 should position itself as a local, city-based TV channel, offering a national service with 35 or more local area opt-outs. Advertisers could be offered national advertising across all the 35 stations, regional advertising packaged in a number of “macro” regions, and local advertising on each station. The IPA forecasts that national advertising would be sold at a 20% discount to ITV, regional advertising at a cost parity to ITV and local advertising at a 20% premium to ITV. John Perriss, chairman of the IPA’s Future of Television Working Group, summed up the report’s suggestions: “The last clear gap in the domestic TV market for both viewers and advertisers is a city-based local service.”

For further information contact Nick Phillips at the IPA: 071 235 7020