Feature

Mixed reaction to ITV strategy plans

Advertisers have welcomed news that ITV has returned to profit, but the broadcaster's strategy plan, outlined this week by the chief executive, Adam Crozier, met with a mixed response from senior media figures.

Adam Crozier: outlines his plans for ITV this week
Adam Crozier: outlines his plans for ITV this week

ITV made pre-tax profits of £97m in the first six months of this year on the back of an 18 per cent rise in ad revenue, and has announced plans to introduce high-definition versions of ITV2, ITV3 and ITV4 on the Sky platform.

Bob Wootton, the director of media and advertising at ISBA, said the results were a sign of "improving fortunes" for ITV and advertisers.

He said: "There are now good early signs of ITV regaining its performance strength."

MAJOR POINTS FROM ITV INTERIM RESULTS

  • ITV is to launch paid-for HD versions of ITV2, ITV3 and ITV4 on Sky in the autumn and ITV1+1 in quarter one 2011.
  • The broadcaster has ambitions to build a "stronger and more international content business".
  • Ad revenues rose 18% to £728m in the six months to 30 June.
  • For the six months to 30 June, overall revenues rose 8.6 per cent year on year to £987m and operating costs fell from £924m to £860m.
  • Pre-tax profits came in at £97m, swingeing into the black after a £105m loss last year.

INDUSTRY RESPONSE

Azon Howie, UK head of broadcast, Aegis Media

"ITV's plans show some really confused priorities – they make sense but far too much is being made of their online and pay-TV revenue streams, which are both going to be peanuts for the foreseeable future.

"The irony is that there's masses of potential for growth in the TV ad market in this country and ITV is doing the sensible thing by having the best people around run its studios, its schedules and its ad sales, but it still feels that it needs to make token gestures to the City by insisting that it has its fingers in the famously juicy online and pay-TV pies."

Phil Georgiadis, chief executive, Walker Media

"The new management have made a positive start and have identified some of the key opportunities that provide ITV with a chance of becoming a world-class media business. Content is ultimately the most important area for them to get right.

"If they can exploit their advantage and, in turn, monetise great content across multiple platforms, in the process becoming less beholden to advertisers, they will have a good chance of succeeding. I think ITV will have to consider working in partnership with other businesses to accelerate its performance."

Alex DeGroote, Media analyst, Panmure Gordon

"Overall, it was a relatively downbeat delivery from Archie Norman and Adam Crozier, but ITV has had a strong start to the year. Profits were well up year on year, driven by a strong ad performance, but the reality is that ad revenues are not going to be up 20% next year.

"The business case is the same as it's been for the past five years; this is exactly what Michael Grade did four years ago and he did it during a more buoyant economy, but at least they have identified the issues. Norman is known for under-promising and over-delivering."

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