TV Net Ad Revenue Drops 7% In 2002, Says ITC Report

The report shows that NAR fell from 2001’s £3.5 billion to £3.2 billion last year. In “stark contrast” to the commerical sector, which suffered at the hands of the advertising recession, the BBC saw its income base rise steadily, according to the report. Revenue from the licence fee spent on television is estimated to have increased by 5.8% to £1.8 billion in 2002.

Not only did commercial broadcasters suffer from declining advertising spend, but they were also affected by the poor performance of the media equity market. The FTSE Media Index fell by 31.1% across the year; this is 7.9% points worse than the decline of the FTSE 100.

The ITC says that these share price collapses had ‘tangible’ effects in the television market by exposing weaknesses in company funding, limiting the ability to raise capital for further investment and resulting in substantial job losses.

Tough year for ITV ITV’s advertising revenues were down by 1% in nominal terms in 2002, but audiences fell by 10% year on year, according to the ITC. Last year was therefore not a good year for the network, although the Commission has a slightly brighter outlook for the coming year, saying:

“With the cost and distraction of the ITV Digital experience now behind them and the possibility of greater coordination through a merger of Carlton and Granada, there are some reasons for ITV to be more confident about the prospects for 2003. Overall though, the advertising outlook for ITV remains cautious at best, with press reports suggesting the autumn advertising contract negotiations season was difficult for the network.”

Commercial Terrestrial 2002 Net Advertising Revenues
	£m
ITV	1,686
Channel 4	632
Five	237
S4C	9
GMTV	58
Subtotal	2,622
Terrestrial sponsorship	56
Total terrestrial revenue	26,783
Source: ITC, April 2003

Channel 4 and Five both fared better than ITV in 2002. Channel 4 saw its NAR rise by 5% in the calendar year, after advertising picked up in the autumn.

Five’s progress is described by the Commission as the ‘success story’ of the year, with ad revenues up from £191.9 million in 2001 to £236.6 million in 2002. This growth reflects improvements in both the quality and quantity of the channel’s audience, says the report.