Ofcom predicts ad share on multichannel TV will double

by Daniel Farey-Jones,, Brand Republic 10-Dec-04, 09:10

LONDON - A report for Ofcom analysing the television advertising market has concluded that multichannel commercial TV's share of the market could double by 2014, while the market will grow in line with GDP.

The report calculated that, if digital penetration is strong, multichannel commercial TV advertising revenues will grow 9.6% annually from £590m in 2003 to £1.62bn in 2014.

The current commercial analogue channels -- ITV, Channel 4 and Five -- would see ad revenues decline 0.5% annually from £2.57bn in 2003 to £2.43bn in 2014.

If digital penetration is weak, multichannel commercial revenues would still grow 8.6% annually to £1.47bn. The current analogue commercial channels' revenues would decline 0.2% to £2.53bn.

The 'Economic Analysis of the TV Advertising Market' was conducted by PricewaterhouseCoopers for Ofcom and will be used to inform any review of the ITV and Five licence terms in 2005.

It points to commercial multichannel as a greater threat to the traditional commercial analogue channels than the BBC.

The research said that if multichannel channels were to capture an extra 1% of total TV viewing, then commercial traditional channel viewing would fall by about 0.6% of total TV viewing in the long term while BBC viewing would fall by 0.4%.

However, the report highlights "a considerable amount of uncertainty surrounding the future for TV advertising". This is down to the potential impact of technology such as personal video recorders and the internet as an alternative platform, as well as advertisers' changing attitudes to TV relative to other forms of marketing.

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