ITV ad revenue under threat as audience share drops

LONDON - ITV could stand to lose up to £100m in ad revenue if its share of audience fails to rally by the end of this year, according to estimates.

The Contract Rights Renewal mechanism, approved by Ofcom as a condition of the ITV merger earlier this year, means agencies can reduce their ad budget commitments to the channel in proportion to its decline in commercial impacts.

Agencies will be able to renegotiate some deals from the end of 2004 with the adjudicator, David Connolly, appointed to settle disputes.

Figures from Barb reveal that ITV's share of impacts across most of its key trading audiences have fallen so far this year. Young and upmarket audiences have been particularly badly hit.

Agency estimates reveal ITV could lose anything up to 3.5% of its share of television revenue if this trend were to continue. This money would be redistributed to the other TV channels.

The share of viewing for Channel 4, Five and multichannel has improved year on year and all could benefit.

The TV market is worth £3.3bn and ITV receives 51% of TV revenue. If its share were to slip to 48%, this could create a £100m gap in its finances.

However, Graham Duff, the managing director of ITV Sales, was optimistic that the autumn schedule would boost the broadcaster's fortunes.

"Overall, we're pretty confident about what we've got coming up. The year will improve from where it is currently," he said.

Duff claimed that event programming, such as the forthcoming Euro 2004 football

tournament and a new series of ‘I’m a Celebrity... Get Me Out of Here!, should increase the broadcaster's share of younger audiences.

Duff admitted that ITV's total share of commercial impacts was down year on year.

However, he said the channel had performed well on all the digital platforms -- and better than agencies had predicted. ITV will present its autumn schedule to media buyers next month.

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