ITV1 stems ad losses as digital channels grow

by Fiona Ramsay, Media Week 05-Mar-08, 09:48

LONDON - ITV stemmed the long-term decline in ad revenues at core channel ITV1 last year to 4%, down from a 12% drop in 2006. However, the commercial broadcaster suffered a 35% slump in pre-tax profits last year.

Unveiling its 2007 report, the broadcaster said financial performance was hit partly by lower revenues from its worldwide content operation, increased investment in digital channels, and broadband start-up losses.

ITV1's adult share of commercial impacts declined by 3.3% to 32% in 2007, while total ITV net advertising revenues last year remained broadly in line with 2006 levels at £1.49bn.

The troubled broadcaster insisted that its strategy to turn itself around remained "on track". It said that total ITV ad revenues are expected to be 1.9% higher in Q1 2007 than in the same period last year, compared with a 0.7% decline in ad revenues across the TV sector. ITV's portfolio of channels also managed to increase their viewing share for the first time in several years to 23.2%, up from 23.1% in 2006.

The reduction in ITV1's net ad revenue was largely offset by the growing ad revenues at its digital channels. Combined, the digital channels increased ad revenues by 33% year on year to £209m. Meanwhile, sponsorship income increased by 6% in 2007, to £56m.

Executive chairman Michael Grade said: "In my first year back at ITV, we put together a growth strategy for the business and strengthened the senior team. The first priority for ITV was to stem the decline. We did more than that, delivering an increase in viewing to the ITV family for the first time in over a decade. For the first time in many years, ITV1 outperformed its competitors and we've continued to do so into 2008."

In a separate announcement, ITV continued its strategy of offloading non-core assets, striking a deal to sell its 50% share in website Liverpoolfc.tv to Liverpool Football Club for £15.75m.