ITV to raise multichannel investment

ITV has announced its turnaround strategy, which includes slashing its sports programming budget by £30 million and increasing investment in its multichannel offer by £20 million.

The broadcaster also said in a trading update released on Wednesday that it expected ad revenues to decline by 4.6 per cent year on year for the first six months of 2006.

However, revenues at the digital channels were up 42 per cent in the first half of the year. The extra £20 million for multichannel TV will be invested in 2007.

Lorna Tilbian, a media analyst at Numis Securities, was broadly supportive of the proposals. She said: "ITV1 is in slow but terminal decline." Ad revenues on the channel "will be offset by its digital channels and new revenue streams such as Friends Reunited".

ITV is on a charm offensive with media agencies and advertisers, to garner support to lobby Ofcom to abolish the CRR mechanism.

Tilbian believes Ofcom will eventually scrap CRR. "It doesn't make commercial sense, it's not a level playing field," she said.

The ITV chief executive, Charles Allen, said ITV was "uniquely well-positioned to benefit as the UK TV market continues to fragment".

Media forum, page 8.

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