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ITV multichannel down 4.5% year-on-year despite launching two new channels
BigOrange
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Only one week of data so we mustn't overstate things as it's a fluid situation and the monthly values will be stronger indicators, but a decline of -4% year-on-year despite launching two new outlets is not what I would call a success and suggests lots of work is needed. Indeed out of the six strong lineup, only ITV Be (which at least launched well, but not well enough to fully offset ITV2's decline) and ITV4 (slightly up, but set to lose its high rating European football fixtures next year) emerge with any real credit. The rest of the portfolio appears to be underperforming at present.
www.barb.co.uk
[B]Channel 2013 2014[/B] [I](Second week of October last year vs this year)[/I] ITV 2 2.3 1.7 ITV 2+1 0.5 0.5 ITV 3 2.3 2.0 ITV 3+1 0.2 0.2 ITV 4 0.9 1.0 ITV 4+1 0.1 0.1 ITVBe n/a 0.5 Encore n/a 0.1 CITV 0.4 0.3 ------------------------------------------------- Total 6.7 6.4 ([HIGHLIGHT]-4.5%[/HIGHLIGHT])
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TV has said it is on track to post a fifth successive year of double-digit profit growth, with interim results for the six months to the end of June revealing an 11% rise in profits to £322 million.
An improved advertising market and increased audience share courtesy of the World Cup saw group revenues grow 7% over the period to £1.2 billion. Each of the broadcaster’s divisions reported double-digit improvements, with its online, pay and interactive channels lifting by 20%.
The company’s own production facility, ITV Studios, reported a 14% rise in pre-tax earnings to £72 million on the back of a strengthening production sector and the acquisition of three companies in the US and Denmark.
New programmes already announced for 2015 include Jekyll and Hyde and Thunderbirds Are Go for UK production and Texas Rangers and Aquarius in the US.
Chief executive Adam Crozier said: “We enter the next phase of ITV’s growth strategy as a demonstrably better business than when we launched the transformation plan in 2010. We will continue to rebalance the business and grow new revenues streams, both organically and through acquisition.”
http://www.thestage.co.uk/news/2014/07/itv-revenues-profits-half-year-results/
Yes, but the digital channel strategy is not just about growing or maximising viewing share.
Indeed ITV's strategy for all its channels (including ITV(1)) is not just about growing or maximising viewing share.
A central component (indeed arguably the key component) of the improvement in the profitability of ITV's channels (ie putting Studios to one side) in recent years has been reducing programming costs.
If they can reduce costs then even if viewing share falls then profits can still rise (*).
They could obviously get a higher viewing share by spending more on the programme budget but they don't because (they believe) it's more profitable to operate at a lower cost base.
(*) Even if the overall ad market was flat - whereas in fact it's actually growing which in turn can produce even greater profit growth.
Could they not be making a better fist of the pay side of things? ITV Encore barely reaching a million viewers a week and lagging behind many relatively small pay TV networks on audience share. The ITV brand alone should be bringing in more than that, but the content isn't there.
I appreciate the success or otherwise of this venture won't be judged purely on viewing figures, but it's still an important measurement.
I agree they would obviously like higher viewing figures but I think the main thing to bear in mind is that it is all being done on a shoestring - costs are literally chicken feed.
In round numbers:
ITV1 prog budget = £900m
ITV digital channels (ie total) prog budget = £120m
I can't find a link but from memory in contrast the total spending on ITV Encore + ITVBe this year is £15m. I know they aren't on air for the full year (Encore - 7 months; Be - 3 months) but even so it's absolute chicken feed in the overall scheme of things.
So they can still be profitable even if viewing figures are very low (and of course Encore is pay so will also get fees from Sky).
I can't comment on the details of the content as I know nothing about it but if it's very weak then I would say it's not surprising because the investment is so low. Whether they'll increase the investment over time I don't know - I guess they probably will to some degree.
Their main strategy really does seem to be growing the "ITV" brand. It is working, and they are growing. They stated a few years back that they didn't want to just chase viewing figures, and hence ad revenue, to survive. At a time when ad revenue was in decline, this seemed like a bold statement.
However, it seems to have paid off, and more power to them. Of course, an independent broadcaster needs decent viewing figures to survive, but they are diversifying their revenue stream, at a time when most long-established broadcasters are losing viewers in the digital age.
Are the above figures in millions of viewers or % share?
What do you expect ITV to say? "we're crap and we know it".
That said they have more renewal in programming than either BBC or CH4 are managing at the moment, I would say that's down to Peter Fincham and not Chief Exec. Adam Crozier.
Agrede.
This...
Seriously, there ARE too many channels. Content (and advertising revenues) is being spread far too thinly! I'd rather have 20-30 channels of half decent quality rather than what we have now, showing mainly shite....
ITV4 already has motor racing, darts and snooker, and has already partially replaced the loss of Europa League games with European Championship qualifiers.