ITV ad revenue hit by BBC’s London 2012 Olympic coverage

13 Nov

ITV has reported a 6% fall in TV ad revenues in the third quarter as advertisers held back spend while viewers tuned into the BBC’s London 2012 Olympic coverage, while a rejuvenated ITV Studios is forecast to make profits of more than £100m this year.


ITV took a battering during the third quarter thanks to the Games airing on the ad-free BBC – TV ad revenues fell 10% in July and 9% in August – but said a 1% fall in September means across the first nine months the broadcaster remains in “positive territory”.


With viewers defecting to the BBC the broadcaster’s flagship channel ITV1 has seen its share of viewing and share of commercial impacts, a key metric media agencies focus to drive deals for their TV advertiser clients, have fallen 6% year on year in the year to 30 October.


With the crucial, and tough, negotiating season for 2013 TV advertising deals set to start chief executive Adam Crozier was keen to point out that its decline has been due to one-off TV events this year.


“This has been an extraordinary year for UK television with many unique events including the Queen’s Jubilee, The London Olympics and the Paralympics,” he said.

“In fact nine out of the top 10 programmes aired will not return next year and as we expected this has affected our viewing performance. However, we do not expect our viewing performance in 2012 to impact our advertising share in 2013 and we are focussed on growing our share of viewing next year.”


ITV said it expects TV ad revenue to be down 2% across the fourth quarter – a fall of 2% in October and November and “broadly flat” in December.


Overall ITV reported total revenues up 4% in the first nine months of the year to £1.57m.


The real success story remains the rejuvenation of ITV Studios which grew revenues by 20% in the first nine months to £498m.

Hits for ITV Studios Come Dine with Me, Hell’s Kitchen US and Mr. Selfridge.

“ITV Studios has performed strongly as our strategy of investing in the creative pipeline and talent again shows through in our results,” said Crozier.

“We expect ITV Studios to report over £100m of profit in 2012, and the number of new commissions and recommissions already secured for 2013 gives us confidence that there will continue to be good underlying growth in the studios business.”


About 46% of ITV’s total revenues now come from sources other than TV advertising, diversification of revenue is a key goal for Crozier.


Revenue from online pay and interactive services also grew about 20% in the first nine months. In the full year of 2011 the broadcaster made £81m, with ITV recently launching a micro-payment services for its online TV service ITV Player.


ITV also said cost savings in 2012 will be £30m, £10m ahead of target, and that its net debt has been wiped out with the balance sheet at a £90m cash position.


“The economic outlook remains uncertain and we continue to see monthly volatility in the UK television advertising market, but the underlying trends have not changed,” said Crozier.


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