ITV struggles to stay in the picture

By Heather Tomlinson
Sunday 24 November 2002 01:00

ITV will struggle to win over advertisers next year, and is expected to lose ground to Channel 5 and BSkyB's satellite service.

The channel's majority owners, Carlton and Granada, are locked in talks with media-buying agencies over the allocation of advertising spend they will receive next year.

The talks will conclude near Christmas. It is estimated that next year ITV will lose market share, despite the success of such shows as Wire in the Blood and I'm A Celebrity ... Get Me Out Of Here!.

The media-buying agency Mediavest predicts ITV's share of advertising spend will fall by just over two percentage points next year, to 51 per cent. However, as it predicts that the overall ad spend will grow 2.5 per cent to £3.2bn in 2003, ITV's revenues should be flat year on year.

OMD UK predicts ITV's market share will fall to 53 per cent from 55 per cent this year, although it is more optimistic on the overall market and predicts it will increase 5 per cent.

However, current talks are crucial to the outcome, and the agencies will not comment on the negotiations. It is expected that ITV will be down and Channel 4 will find it hard to maintain its share, while both Channel 5 and BSkyB's satellite service will gain ground.

Next week Carlton and Granada report financial results for the year to end- September. Deutsche Bank predicts Carlton's sales will fall 8.2 per cent with a net loss of £181.5m, while Granada will see a 4.2 per cent fall in sales and a net loss of £17.3m.

Both companies have been under pressure – hit by plummeting advertising revenues and a fall in viewing figures which has further alienated advertisers. The companies plan to merge to alleviate the strain, although it will be a long process to comply with regulations.

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