TV ad revenues set to rise despite slowdown

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The Independent Online

Global television advertising revenues are expected to grow by nearly 6 per cent to $123bn (£61bn) this year, despite fears of an economic downturn.

In the UK, the market will rise by 1.5 per cent to $7bn next year, and will grow by a further 24 per cent over the next four years, according to research from industry analysts Informa Telecoms & Media.

"The Olympic games and the US election will push up TV advertising spend worldwide this year," Simon Murray, an Informa media analyst, said.

Forecasts for the following years are also strong, with the global market set to grow to $148bn in 2012.

But the character of the sector is changing. Audiences are increasingly fragmented and pay TV channels are taking a growing share of advertising revenues. Subscription channels will account for 15 per cent, or $18bn, globally in 2008, which is more than double their share of five years ago.

Subscription channels in the UK have a higher share of advertising revenues than in any other country, largely because ITV is the only ad-supported broadcaster with an audience share of more than 10 per cent, leaving more business for pay TV channels to compete for.

The predictions for 2008 show growth of 6.2 per cent to $2.4bn, and another 4.5 per cent rise next year. Free-to-air broadcasters are responding to audience fragmentation with thematic channels such as ITV2 and E4.

"Most major free-to-air channels realise their audience share, and therefore their ad share, will fall because of increased competition," Mr Murray said.

"The thematic channels were launched to make better use of programme libraries, but also because they are seen as good way of growing ad revenues in the future," he said.

Broadcasters are also eyeing up the internet. And while some will use a subscription model, the majority will rely on advertising.

This week, announced a partnership with the social networking site Bebo, in which ITV2 content will be freely available to the site's 40 million users. The first programme – US import Gossip Girl – went live this week, with more due soon.