Despite a recently reported 42% jump in H1 profits [WAMN: 10-Sep-04], British commercial broadcaster ITV may have to pay out a potential £100 million ($179m; €146.5m) in compensation to advertisers over the next three years unless it can turn around a dip in viewing figures. During the first six months of the year, ITV's ratings share dropped to 41% from 42.7% for the same period in 2003.
The obligation to open its wallet is part of the deal that led to the recent merging of Granada and Carlton into the single ITV entity.
Peak-time viewing figures fell slightly, by 0.4 of a percentage point to 31.5%, as rival broadcaster BBC's Olympic Games coverage and Channel 4's docusoap Big Brother pulled in the audiences. Wider than that, the broadcaster is facing stiff competition in the increasing number of multi-channel homes.
Young males of the 16-24 age group seem particularly keen to switch off from ITV, according to audience ratings body BARB (Broadcasters' Audience Research Board).
Although no UK broadcaster was immune to the phenomenon, ITV suffered a substantial 17.2% decline of the important advertising target group in August compared with last year.
Charles Allen, ITV's ceo, hopes the falling figures will be reversed with this year's autumn schedule and the launch of new channel ITV3. However he added that ITV1 programmes that failed to attract viewers would be axed.
Claiming that "everyone recognises that collaboration is an opportunity for all of us … the days of the grumpy old men really have gone", Allen also extolled the virtues of working with Channel 4 and Five to promote the values of advertising.
He is now expected to discuss collaborations with the BBC and other commercial TV networks such as BSkyB. Although not divulging any details, the talks could focus on areas such as programme distribution and sales, education, religion and the arts.
Says Allen: "We can compete to the benefit of viewers but collaborate to the benefit of stakeholders in our business."
Data sourced from: multiple sources; additional content by WARC staff