UK Regulator Warns Trad TV of Multichannel Threat

14 December 2004

Traditional advertising models are likely to take a pounding from the avalanche of new digital and multichannel TV services over the next decade, cautions a report from Ofcom and PricewaterhouseCoopers.

Media Cassandras have been wailing similar warnings of woe for several years now. But coming from such a heavyweight source, a pandemic of nervous tics is expected among the broadcast TV sector.

The new kids on the media block are expected to double their ad revenues and cut an ever-increasing slice of audience share by 2014, with multichannel becoming "increasingly a competitive constraint on, and substitute for, traditional advertising".

Piling on the agony, the BBC's expansion of its digital services - which carry no advertising - will also have an adverse impact on commercial companies' ad revenues - including those of the multichannel sector. This could hit the latter's "price elasticity", warns the report.

Data sourced from Media Week (UK); additional content by WARC staff