Wednesday, 4 August 2010

ITV 2010 First Half Profits and Move to Online

August is usually a quiet time in Britain’s favourite pastime, TV land, before the adventures start all over again. No sooner as we realise that the nights are drawing in, so we will see the long run in to Christmas start with the return of the X Factor. This normally brings cheer for ITV bosses looking forward to better ad revenues but they have had better fortunes this year.

2009 was a bad year for ITV. Advertising revenues slumped massively and I suspect that Adam Crozier, previously of Football Association and Post Office fame, probably wondered why he took the job. Luckily for him however, by the end of 2009 ad buyers started to remember the reach of primetime television advertising, allowing 30 slots in the final of X Factor last year to be sold for upwards of £250,000 a go.

This year it’s a very different story and ITV have just announced pre-tax half year profits of £118m which you can compare with a loss of £4 in the same period last year. This is an impressive turnaround in any business especially one that is supposedly under massive competition, not just from the expansion of available television channels, but also from ad spend moving to other media especially the internet.

ITV has made some big changes in a small amount of time and are now concentrating on growing audience share, selling more of its shows to the international marketing and exploiting its programme content across multiple channels.

It is the last of those that has created the most media hype as its first move is a deal with Sky to put its high definition channels on Sky’s paid for platform. It looks as if ITV1 HD will continue to be available through Freeview but if you want the HD versions of ITV2, 3 or 4 you will need a Sky subscription. This is designed to help ITV become less reliant on your traditional TV ad revenue and moves it into the subscription TV market, albeit using a massive partner in the form of Sky.

During the first half of this year video views on the ITV Player, its equivalent of the BBC iPlayer, fell 14% but it did have 4% more people watching. This will also be a key area for them as unlike the BBC they can put ads all over web TV viewing. Crozier has put on record this is an area for growth and that they are “subscale given the size of the online video market”. He has backed this with a £75m investment over three years in online. So look out for more promotion of ITV Player and the probable introduction of pay per view micropayments.

So all very nice for ITV but what does this mean for the viewer? Well hopefully it should be good news. If ITV looking to boost its online presence and international presence can only do that by generating good content and by that I mean quality programming. I hope that ITV’s new management team will recognise that to grow it has to make more shows that people want to watch. A turnaround in fortune gives it a real chance to create the programming that it built a worldwide reputation for and be grow it profits at the same time.

Tim Youngman is head of digital marketing for Archant