Viewers up, revenues down

Despite a solid autumn schedule, ITV will be hamstrung by a depressed TV advertising market, writes Jeremy Lee.

For ITV, a strong autumn performance on its core ITV1 channel is vital if it is to prove to the City that the problems that have dogged its audience figures and advertising revenue over the summer months are cyclical and reversible.

The season is also an opportunity for the broadcaster to move on from the turmoil that led to the resignation of chief executive Charles Allen, and convince advertisers it is back on track ahead of its 'up front' presentations of forthcoming shows, which will precede the annual agency negotiations.

The autumn schedule has just kicked off and, at face value, there is much to appeal to both audiences and advertisers. Ian McCulloch, ITV's commercial director, is predictably upbeat. 'It is the strongest schedule we have had for a long time,' he says. 'It marks a return to our point of difference.' Even some usually cynical members of the media-buying community seem impressed.

There is a concentration on high-quality drama, a genre in which ITV has a strong heritage, targeting the upmarket AB demographic. As well as the return of old favourites such as Cracker and Prime Suspect, there are a number of debut series, such as Mysterious Creatures, starring Brenda Blethyn, Housewife 49 with Victoria Wood, and Driving Lessons, that show great promise.

Populist programming

For the younger audience, ITV is hoping that the public's interest in entertainment stalwart I'm A Celebrity, Get Me Out of Here has not waned, while the return of The X Factor, which will run until Christmas, should also secure a strong Saturday-night performance.

Parkinson also returns, as does Ant & Dec's Saturday Night Takeaway, while Trinny and Susannah have brought their crowd-pleasing antics from the BBC.

Chris Locke, UK buying director at Starcom, says the ITV1 schedule looks solid. 'It is great news. Audiences should hold steady,' he says. It is a view echoed by Daren Rubins, business director at PHD, who says that returning to tried and tested formats should ensure the channel holds on to its audience share.

Rubins is disappointed that ITV has taken the easy route of running proven rating-winners - 'It is solid and predictable, but not particularly inspiring; it needs to challenge existing formats,' he says - but given the turmoil of the past few months, taking the safe option seems an eminently sensible thing to do.

Further evidence that the pervading sense of gloom that has cloaked the broadcaster for so long is finally lifting comes from ITV1's digital sister channels, which are performing strongly.

ITV2 recently reached a watershed in its eight-year life when it achieved a better audience share than Five across all dayparts. And ITV4 has already scored an early success, having defeated E4, its more established and arguably more fashionable youth rival, with a repeat of the movie Highlander against Russell Brand's latest show.

However, while the positivity surrounding the autumn schedule could finally remove the usual prefix of 'beleaguered' from ITV's name, it is not all good news. Though media buyers are optimistic that it has got its schedule back on track, ITV, in common with its fellow TV broadcasters, is facing a particularly depressed autumn advertising market.

Starcom estimates that total TV ad revenue for the last quarter of the year will be down 8% on the same period last year (see box). For ITV, which could be expecting buoyant audiences, early estimates suggest the decline could be even more profound.

Some indicators project that by the end of the year, the total TV ad market will be down 5.2% on last year, while ITV will have suffered a decline of at least 13% on 2005.

McCulloch admits that foreseeing the final revenue outcome is difficult. With the prediction of buoyant audiences and a shortage of advertiser demand, one positive consequence is that the cost of advertising on ITV will fall, resulting in some bargain airtime prices. For ITV, the trick will be to encourage more late money into the market, which will provide it with a much-needed boost.

Though the continuing depressed TV ad market will do nothing to help ITV's finances, a strong schedule will at least put the broadcaster in a better position as it faces the 2007 negotiation season and allow it to pre-empt media agencies taking revenue away from the core channel under Contract Rights Renewal.

As well as providing ITV1 with the mass audiences that advertisers require, this should help to alleviate City pressure for more change.

DATA FILE - ADVERTISING REVENUE

Jan-Sep 05 Jan-Sep 06 % chng
(pounds m) est(pounds m)

ITV1 1159.3 1033.8 -10.8
Total TV 2532.9 2428.0 -4.1

Oct-Dec 05 Oct-Dec 06 % chng
(pounds m) est(pounds m)

ITV1 457.1 371.7 -18.7
Total TV 949.1 872.1 -8.1

2005 total 2006 est total % chng
(pounds m) (pounds m)

ITV1 1616.4 1405.5 -13.0

Total TV 3482.0 3300.2 -5.2

Source: Starcom

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