ITV ad revenue under threat as share drops

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

The Contract Rights Renewal (CRR) 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 per cent 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 multi-channel has improved year on year and all could benefit.

The TV market is worth £3.3 billion and ITV receives 51 per cent of TV revenue. If its share were to slip to 48 per cent, this could create a £100 million 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.

DECREASE IN ITV SHARE

% decrease year on year in ITV's share

of 30" equivalent impacts

Housewives with children -6

Housewives -5

ABC1 adults -7

16-34 adults -7

16-34 women -5

ABC1 women -7

16-34 men -10

Source: Barb.