Advertising will remain the prime source of revenue for TV
companies over the next ten years, according to forecasts by Zenith
Media that contradict conventional industry wisdom.
In previous forecasts by Zenith and others, the subscription revenues
generated by European pay-TV companies such as BSkyB were said to be on
target to converge with advertising revenues, with subscription
eventually passing advertising as the main source of revenue for
Now a combination of economic growth and further deregulation are
expected to drive ad revenues, while Zenith is placing a more modest
ceiling on the amount of money households are expected to spend on
subscribing to new channels.
The media company forecasts that advertising revenue will pull ahead by
the year 2007, while pay-TV revenue will level off. It says European
pay-TV revenue will by then top USdollars 27 billion, compared with TV
adspend of USdollars 35 billion at constant 1996 prices.
Jonathan Barnard, publications manager at Zenith, said consumers would
not continue to pay out more and more for new TV channels. ’Unless TV
companies can continue developing new and very different services, then
the subscription market will level out,’ he said.
In its latest Zenith on TV report, the agency also turns its spotlight
on UK TV programming, criticising both ITV and Channel 4 for their
’unacceptably weak’ Saturday night line-ups.
Zenith also strikes a note of caution with regard to plans to move News
at Ten. ITV is understood to be plotting two half-hour news bulletins at
6.30pm and 11pm, but Zenith calculates the cost of filling the 10pm-11pm
slot with movies and comedy shows will be pounds 50 million a year. ’We
just can’t see ITV shareholders coughing up,’ the report says, ’and the
only other source of cash is advertisers.’