TV ad revenues fall 6.2 per cent

Agencies forecast strong performance from Sky and digital channels, though terrestrial TV suffers.

The television market has seen advertising revenues fall by 6.2 per cent period on period to £814.7 million in the first quarter of 2006, according to agency forecasts.

Channel 4 is thought to be one of the underperformers, despite a vintage 2005 and a rise in audience share.

Media agency sources said that, on the basis of advertising booked for the first quarter of 2006, Channel 4's share of ad revenue has slipped by 8 per cent to £165 million.

Five has also been badly affected, with revenues down 11 per cent to £66 million. As largely expected, ITV1 has been the worst hit, experiencing a drop of 13.5 per cent to £351.8 million.

Because the broadcaster has lost audience, advertisers have reduced their commitment pro rata without penalty under the terms of Contract Rights Renewal.

However, the digital offerings of both ITV and Channel 4 have performed strongly and, along with their multichannel rivals, significantly boosted their share of spend.

Agency sources said the overall multichannel market was up 9 per cent to £234 million, or 13.4 per cent to £141.8 million if Sky is taken out of the equation.

Sky has done well, despite forecasts that it would falter. It is expected to have upped its share by 3.6 per cent to £92.2 million.

Agency contacts downplayed the television market's overall 6.2 per cent decrease. One contact attributed this quarter's £54 million deficit to a "freakishly good" first quarter last year. Easter falls in the second quarter this year.

The football World Cup is also expected to drive the market in the second quarter.

Agencies said they expected 2006 to be up around 2 per cent on last year.

There are high hopes for the fourth quarter, which should benefit from an active retail sector. Strong online sales are expected to build momentum in early autumn, with high-street sales continuing the trend in December.