ITV quarterly results were out yesterday and the pattern we have seen for a long time continues:
10 months to 31 October 2015:
ITV(1) SOCI - down 4%
ITV Family SOCI - down 3%
and yet:
9 months to 30 September 2015:
ITV Family advertising revenue - up 6%
And, significantly, advertising revenue is up more than the market - ie ITV's share of the advertising market is up, despite SOCI falling.
So, despite all we hear about ratings day in day out, ITV continues to perform very, very strongly - and whilst that is the case they have no incentive whatsoever to spend any more money on programming.
Now some might wonder "Ah, but aren't they storing up problems for the future?" Well maybe, maybe not - but the same thing could have been said at any time over the last few years - and yet the same ratings trends continue without any impact on the financial results.
The answer appears to be that ITV is still quite simply the only place to advertise if you want to get to the mass market. Whether X Factor gets 8m or 7m or 6m really just doesn't matter if all other commercial channels can only get audiences which are a fraction of ITV's.
So it appears that the strategy will remain exactly as it has been for some time - focus on the 4 key areas, ie:
Soaps
Big hitters - XF, BGT, IAC (+ TV to be added)
Sport - WC, EC, RWC, England internationals (+ 6N now added to partially offset loss of CL, FAC)
High profile drama
Ensure that those 4 areas continue to be head and shoulders above anything on any other commercial channel - which they are - and then the entire rest of the schedule is just filler to be done at minimum cost to keep the overall total programme budget flat.
And if the programme budget is held flat (or at least very close to flat) whilst advertising revenue rises then profits must rise - which is what has been happening now for many years (since they hit rock bottom in 2008).
NB. Advertising revenue growth will be weaker in Q4 of 2015 - forecast at 3% - but that is still growth.
http://www.itvplc.com/media/news/itv...ng-update-2015