Magazine article Marketing

Media Analysis: ITV Senses Renaissance

Magazine article Marketing

Media Analysis: ITV Senses Renaissance

Article excerpt

After years of underperforming, the broadcaster is being buoyed by rising audience figures, writes Jeremy Lee.

The tone and nature of this week's annual ITV strategy update to the City and press is likely to be very different from previous years.

The event, which under former chief executive Charles Allen often appeared simply to be an opportunity to reel off a litany of excuses about the broadcaster's disappointing audience and revenue performance, while announcing substantial cuts to its cost base, will have a distinctly upbeat feel. As ITV executive chairman Michael Grade takes to the podium to announce his plans, he can be forgiven for feeling rather pleased with himself after just nine months in the job.

First, the Office of Fair Trading has just announced that from January next year it is willing to review the Contract Rights Renewal (CRR) procedure, which has been in place since 2003 and has resulted in a significant loss of revenue from ITV1. Grade has described CRR as a 'straitjacket', responsible for holding back ITV's financial recovery (see table); getting it reviewed, and preferably scrapped, was one of his stated aims when he took the job.

It remains possible that CRR will not be axed but simply watered down to reflect the fact that ITV still has more than 40% share of the TV ad market. Moreover, any change that is made will not come into effect until 2009 at the earliest, but there are signs that the ITV1 schedule has started performing rather better, which could augur well for the upcoming airtime negotiation season.

According to BARB, compared with the other commercial terrestrial broadcasters, ITV1 performed strongly and is the only one of the group to have increased its average volume year on year, doing so by 4.4%, where Five was down by 5.9% and Channel 4 by 12.6%. Even BBC One has seen a decline of 4.6%.

ITV1 has also closed the gap on BBC One across all day parts this summer, to just 4.3 share points compared with 6.3 last summer. In peak-time, ITV1's performance is even more impressive. For the year-to-date, it was ahead of BBC One by 2 share points, but has now increased this to 2.2.

'At the moment, ITV is looking good for 2008,' says one TV buyer. 'It has, of course, been helped by the poor performance of Big Brother on Channel 4, but ITV1 is showing the green shoots of recovery. However, the autumn is key to its performance in negotiations.'

The Rugby World Cup, which kicked off last week and runs until 20 October, should help boost ITV1's share over the autumn, particularly among upmarket and male viewers. The X Factor, meanwhile, is continuing to attract mass audiences, having performed even better this year than in previous series, with the first episode pulling in a record-breaking 9. …

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