Media: All About ... ITV3 - a blend of old and new

Will another channel mean more viewers for ITV, Alasdair Reid asks.

ITV3 had a confident launch last week. Having secured Sky Digital carriage via a last-minute deal that allowed it to replace the now-defunct Granada Plus, it came on air with a previously unseen episode of Rebus, the Scottish detective drama starring John Hannah, which pulled in 492,000 viewers. Across its first evening, ITV3 was the second most-watched non-terrestrial channel after Living TV.

Good start. Now comes the hard grind. To some cynics, the launch of ITV3 is a very small earthquake indeed. They say it is hardly much of an evolutionary improvement on Granada Plus - it will merely add slightly newer archive material (with the emphasis on slightly: Inspector Morse and Prime Suspect weren't exactly made yesterday) to a programme line-up featuring the tired old usual suspects such as Cracker and Sherlock Holmes.

And, those same cynics add, when ITV says the new channel's target audience is aged 35 and above, it is being more than a little disingenuous - its median age is likely to be a lot closer to 55 than 35.

But observers say the real issue is that ITV now seems to have a far more coherent strategy and the cornerstone of that strategy is branding.

The network, in short, now has a real family of properties, all of which have ITV in the title. That's a great basis to build on.

Paul Longhurst, the managing director of The Allmond Partnership, says the channel's trump card could be the US programming it is promising to buy. But programming is neither here nor there, he adds, if it isn't scheduled and promoted in the right way. "In general, ITV has yet to show it has acquired the skill-sets (especially in scheduling and cross promotion) you need to prosper in digital television. It is different from terrestrial TV in that appointment to view is less of a factor in multichannel," he says.

1. For ITV, many observers say, this move was absolutely essential. In the digital age, it makes sense for a broadcaster with a lot of content to make the most of it. It's all about sheer numbers - the more channels you have, the greater your chances of increasing your share of audience (with ITV's share inexorably falling in the face of increased competition).

ITV3 is a step forward from Plus - it will be an environment where bought-in programming from the US will not look out of place. ITV in general has a much stronger proposition. It is now even more clear that ITV is in this digital game seriously and for the long term.

2. For ITV2, in particular, the biggest implication of this move is that it has won a place higher up the pecking order on Sky Digital's Electronic Programme Guide. Having given ITV3 the old Granada Plus slot, it made sense for BSkyB to position the two ITV channels together, moving ITV2 so they now occupy 118 and 119. There has been speculation in some quarters that Sky is the most obvious loser as a result of this.

Being higher up the EPG pecking order might help ITV2 put more pressure on Sky One, which has already been struggling in ratings terms this year.

However, Sky sources say there's no evidence to show that position on the EPG is anything other than an irrelevance.

3. From BSkyB's point of view, this brings to an end a long (and seldom discussed) relationship between Sky and ITV in the satellite television business. In the late 80s, Granada was a founding investor in British Satellite Broadcasting, the state-regulated satellite platform. When the ailing BSB was taken over (the term "merger" was used without irony at the time) by Sky to create BSkyB, Granada continued as a shareholder in the new venture - and, at one stage, the chairman of Granada Group, Gerry Robinson, was also the BSkyB chairman.

Despite considering itself a pioneer in multichannel broadcasting (largely because of this initial BSB investment), Granada was insufficiently confident of its ability to launch its own channels on the BSkyB platform. Thus, in 1996 it launched Granada Satellite Broadcasting to produce Granada Plus and Granada Men & Motors (the latter channel is under review and in the long term it is unlikely it will survive in its existing form).

4. Channel 4 and five could find ITV3 a problem, some observers say. But perhaps Channel 4, having tried and failed with an over-ambitious brand extension strategy a few years back, will not look on ITV3 with envy.

Five is looking at its own multichannel strategy but has so far struggled to make any headway.

WHAT IT MEANS FOR ...

ITV

- The emergence of a coherent brand family in the digital television domain will allow for much more effective cross-promotion within the family.

- But there is a worry it will merely cannibalise existing ITV audiences. If you aggregate the audiences of ITV1, ITV2 and ITV News, their combined share of UK viewing for the first ten months of 2003 was 24.6 per cent. The equivalent figure for 2004 was 23.8 per cent.

- ITV could see this as a way to try to escape the stranglehold of CRR - the remedy mechanism overseen by Ofcom to stop the network abusing its monopoly leverage in the airtime market. ITV2 and now ITV3 are not covered by CRR, so the network will have high hopes of using the two digital channels to attract incremental revenue.

ADVERTISERS

- Advertisers will see this as an opportunity to target an older, upmarket audience in a quality drama programming environment.

- On the other hand, older audiences are not always regarded as a priority by advertisers, particularly in the core categories of cars, finance and telecommunications.

- They could worry that ITV will see this as an opportunity for conditional selling. The network can't do this in an overt manner but it could, in theory, threaten to withdraw privileges - for instance, flexibility as regards campaign timings on ITV1 - if an advertiser refuses to increase its spend on ITV2 and now ITV3.

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