Between the Lines: Too early to cheer TV spend

At last, welcome news - the TV industry is seeing a healthy increase in advertising revenue (page 3). We can all relax, the boys' bonuses are looking good.

But while the figures are a positive sign marketing budgets are increasing and above-the-line spend is on the up, it is not time for universal celebration.

The news gives Channel 4's chief executive, Andy Duncan, for one, something to chew on.

While Channel 4 must be gratified to have put in the strongest performance, the fact that its share has breached the 20 per cent mark undermines Duncan's bid to convince Ofcom that the station needs additional long-term funding (page 6).

And advertisers, too, should approach the figures with some caution.

The flood of new money into the total market has combined with falling audiences to create a double-whammy not seen since the dog days of 2000 before the dotcom bubble went pop: airtime inflation. The situation for some audiences, particularly young men, is so severe that agencies are now planning for year-on-year inflation levels of up to 30 per cent.

The good news is that, bar Channel 4's Celebrity Big Brother, the stations have yet to launch their best programmes of the season, so these high levels of inflation will hopefully not be sustained.

TV inflation - though at lower levels - is likely to recur throughout 2005, but if the latest Centre for Economics and Business Research data is right and there is a 7 per cent increase in total ad revenue, it should be seen as a necessary evil.