However, the Olympic games continues to give a much needed boost to the sector this summer and as a result it has revised ITV1’s forecast for the year upwards to 3.2% from 2.9%.
According to Merrill Lynch, the broadcast market is still way off making the recovery many are desperate for. Julien Roch, analyst said: “The main risks to our target price are a weaker advertising recovery than expected and unfavourable regulatory out for PSB [public service broadcast] review and licence renewal.”
It seems things are going to get worse before they get better, especially for ITV, as Merrill Lynch downsized its 2005 forecast for the commercial broadcaster to 0.0% from 1.0%.
ITV has been hit with a run of bad luck but most recently, reports suggested that the company could stand to lose up to £100 million in advertising revenue as audience figures continue to decline, leaving the door open for advertisers to negotiate more competitive deals (see ITV Could Face Ad Revenue Shortfall).
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