Brexit blocks the view ahead for UK media industry
A view from Gideon Spanier

Brexit blocks the view ahead for UK media industry

Sometimes, when you've climbed a mountain, it's worth looking back and admiring the view, ITV's departing chairman, Archie Norman, said at the annual general meeting.

And the view behind looks good. Norman timed his arrival well in 2010 as the ad market was recovering from recession. ITV’s profits and share price have quadrupled. His exit also looks smart, handing over to Sir Peter Bazalgette just as ITV suffers a bout of Brexit jitters.

The view ahead doesn’t look so rosy. April’s worse-than-expected 13% slump in ad revenue was ITV’s worst performance in 33 months since June 2013.

Chief executive Adam Crozier is blaming it on advertisers "pressing the pause button" since the Brexit vote was announced in February, although Channel 4 thinks supermarkets investing in price promotion instead of ads and the slowing global economy are also factors. Crozier insists the "fundamentals" of TV remain strong, despite the online viewing boom.

On the plus side for ITV, Norman and Crozier have reduced dependence on advertising, which now generates only half of revenues, because the broadcaster has bought up international production companies and is selling more shows overseas.

Norman, a former Asda boss and ex-Tory MP, sees the industry with the clarity of an outsider. At the AGM, he recalled how, in 2010, he had described the ad market as a "faulty shower" because it is often too hot or too cold. 

Now, he admitted, ITV is experiencing "a cold blast". The implications for the media industry are ominous. "If ITV are saying that, you can imagine how it is for us," one publisher said at last week’s launch party for the Media Week Annual. Meanwhile, an agency boss warns project work has been drying up and finances are stretched as clients sit on their hands.

Most media people hope Britain stays in the European Union and that the ad market gets a bounce after the 23 June referendum. But Crozier is not sure what happens when advertisers take their finger off the pause button and if money immediately returns.

Wisely, and because it’s good governance, Norman won’t be at ITV to find out. Over at The Guardian, its former editor Alan Rusbridger has discovered the dangers of staying too long as he has had to give up chairing the paper’s owner, The Scott Trust, because of internal anger about ballooning losses and the lack of an internet paywall.

It’s good to leave wanting more rather than staying too long. Except when it comes to EU membership.