Ad Downturn Takes Toll on British Terrestrials

LONDON,
November 10: Advertising revenues on the U.K.'s main free-TV commercial
channels—ITV1, Channel 4 and Five—will drop 7 percent in 2009,
according to a new report from ZenithOptimedia.

Their
offshoot digital channels, however, are expected to buck the economic downturn
with a 10-percent revenue hike, the UK Television Forecasts
to 2012
report indicates. This increase, however, will not be enough to make up for the
fall on the primary terrestrial services; as such, total revenues at ITV,
Channel 4 and Five are expected to fall about 4 percent next year. And
ZenithOptimedia projects no additional growth in TV ad expenditure until 2010.

The
less costly digital channels, however, will see a change in their fortunes, as
ZenithOptimedia forecasts a 6-percent rise in ad revenues in 2009, with an
average 8-percent growth per year until 2012. The rapid proliferation of
digital channels, however, has contributed to the fall in the price of TV
advertising. At £4.81 per 1,000 adults, a 30-second spot today costs the same
as it did in 1994, and is 29-percent cheaper than in the peak year of 2000.

By
year-end, 91 percent of British households will be receiving digital TV on at
least one set, rising to 97 percent by the end of next year. Freeview's current
dominance is expected to be overtaken by free satellite services from Sky and
the BBC and ITV. Nonetheless, Freeview will be the largest digital platform
when the last analogue signal is switched off in 2012, reaching 38 percent of
U.K. homes. Sky’s pay satellite service will follow with 37 percent and Virgin
Media’s cable service will come in third with 16 percent of the market.

—By Mansha Daswani