ITV’s future could be bleak, says Bruce Steinberg, unless it faces the
growing threat from satellite and cable channels and comes up with a
coherent ad campaign
The television landscape is changing rapidly. When UK Gold launched
in 1992, the UK cable and satellite universe was small - the same size
as the Anglia TV region.
Today, the multi-channel subscriber base is bigger than the London
region and now, more than 24 per cent of UK homes have cable or
Advertisers and their agencies understand, and are exploiting the value
of, the multi-channel audience. In fact, for the first five months of
this year the profile of this audience was both younger than ITV’s (51
per cent against 34 per cent of the under-35s) and more upmarket (40 per
cent against 36 per cent of ABC1s).
Old viewing patterns have disappeared and although the terrestrial
channels still account for the bulk of viewing in cable and satellite
homes, more than a third of viewing is on the new channels.
When someone installs either a satellite dish or cable, ITV’s share of
commercial viewing plummets from 76 to 41 per cent. That’s a lot of
eyeballs to lose. Imagine Coca-Cola shedding 46 per cent of its market
share in more than 2,000 homes a day.
The ITV companies seem to have woken up to the threat posed by the
competition. But the response so far, in the shape of a pounds 5 million
ad campaign, has been confused and ineffective.
In the multi-channel environment, it’s crucial to keep your message
simple. The ITV campaign features the ITV logo, with the number 3 next
to it, and the slogan, ‘Britain’s most popular button’.
There’s a problem with this campaign. First, in most cable and satellite
homes - where ITV’s viewing share has already declined drastically - the
chances are that button number ‘3’ isn’t the ITV button at all. Instead,
it may well be for UK Gold or Sky Movies.
Obviously, a branding message based on the button that selects a channel
could fall on deaf ears. Branding your channel ‘3’ is likely to send a
confusing message to many homes where the number on the handset bears
little relation to the identity of the channel.
Second, ITV is not known as Channel 3. Open Radio Times or TV Times and
the ITV schedule is under ITV/LWT or a regional title - not a number.
Third, there is the endemic problem faced by the ITV companies - the
tension between viewing a national network and a federation of regions.
While the ITV Network Centre is trying to push a strong national brand,
the regional ITV companies are equally concerned to protect and enhance
their own identities. LWT recently decided to drop out of the ITV
programme schedule. Granada and Carlton want to create strong brands
outside their own regions with their own cable and satellite channels in
Viewers are faced with three different brands: ITV, their regional ITV
company (building and branding their own channels) and the new ITV3
logo. All of this seems unlikely to add clarity to an already confusing
ITV is in a vicious circle with viewership eroding every year, revenue
flat in real terms and escalating costs.
This could translate into reduced programme budgets with more money
focused on an ever smaller number of flagship shows and a reduction in
importance for the channel in viewers’ minds.
ITV will always be a valuable mass-market channel with excellent
coverage, for example, showing blockbuster serials such as the Bill or
Coronation Street (if Sky doesn’t buy it).
It’s to the credit of the ITV companies that they have recognised the
problem of attracting viewers in an increasingly competitive
environment. But, so far, they’ve failed to hit the right button.
Bruce Steinberg is the chief executive of UK Gold and UK Living