ITV to launch digital channels in HD

ITV today confirmed plans for a pay-TV strategy to launch high-definition versions of its digital channels on Sky.

The broadcaster said ITV2 HD, ITV3 HD, and ITV4 HD will launch as part of Sky+HD's subscription package of channels this autumn.

ITV2 HD will launch in October for the start of The Xtra Factor, with ITV3 HD and ITV4 HD launching shortly afterwards.

Adam Crozier, chief executive of ITV plc, said: "I'm delighted to announce ITV's move into pay television today with this deal with Sky.

"We will launch our highly successful family of digital channels - ITV2, ITV3 and ITV4 - in high definition for the very first time as part of the Sky+HD subscription.

"Building new revenue streams by exploiting our content across multiple platforms is a key part of the ITV Transformation Plan announced today.

"Pay television has seen continual growth over the last decade and this deal is a great example of how a new, subscription-based launch can complement ITV's existing free-to-air channels."

ITV also announced an improved financial performance today as it returned to the black with pre-tax profits of £97 million for the six months to June 30.

The television advertising market suffered its worst year on record last year but has since shown signs of recovery, helped by World Cup spending.

ITV said net advertising revenues rose 18% in the first half of 2010, compared with a rise of 15% for the wider market.

It expects the figure to rise by 15% in the current quarter, but the outlook for the fourth quarter and into 2011 remains uncertain.

The broadcaster said it had to address the fact that its "core proposition" of "free-to-air broadcasting" had been "steadily eroded" by changes in technology.

ITV had "failed to equip itself in the changed environment", Mr Crozier said.

The broadcaster had to be "less dependent" on TV advertising.

Recent changes at ITV have included the signings of star names Adrian Chiles, Christine Bleakley and Jonathan Ross from the BBC.

Breakfast programme GMTV is being completely overhauled, and relaunched with Chiles and Bleakley as Daybreak.

The broadcaster said the new high-definition channels will showcase an "increasing range" of programming.

Programming on ITV2 will include the likes of Britain's Got More Talent, The Xtra Factor and I'm A Celebrity... Get Me Out of Here Now!

Drama will include the third series of Secret Diary Of A Call Girl and acquired content such as Vampire Diaries and Gossip Girl, and films.

The figures for 2010 follow a difficult 2009, when advertising revenues collapsed as ITV was hit by the UK-wide recession.

The changes are part of ITV's "five-year transformation plan".

Bosses want half of ITV's revenue to be derived from sources other than TV advertising, such as pay-TV, sponsorship, content-selling, merchandising and online.

ITV also wants to develop more drama and light entertainment - to sell around the world.

"As it happens, those are also the genres that sell best internationally", Mr Crozier said in a conference call.

"That's what ITV is famous for - the home of light entertainment.

"We need to produce more of it ourselves but to do it on merit."

Asked whether he would consider selling top shows like Coronation Street or The X Factor to channel Five, now owned by Richard Desmond, he replied: "A very large 'No'."

ITV also said it would launch a catch-up channel, ITV1+1, early in 2011.

Mr Crozier said there were "no plans" to charge for ITV1.

The non-HD versions of ITV's digital channels will remain free-to-air.

The broadcaster, which sold the Friends Reunited website last year for £25 million after paying £175 million for it, said it must improve its online offering.

Mr Crozier said: "We are not punching our weight online. Despite our size, our performance tends to be pretty similar to Channel 4. That's not a great place to be."

ITV3 HD will include drama such as Lewis and Marple, factual programmes such as Joanna Lumley's Nile and Martin Clunes: Islands Of Britain, and classic drama.

ITV4's high-definition content will feature sports events such as Tour de France and Uefa Europa League, as well as films.