OPINION: Why ITV is losing viewers to its cable and satellite rivals

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

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

satellite TV.



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

the future.



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

situation.



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



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