Investors’ concern over the growing subscriber churn rate at ITV Digital [WAMN: 12-Feb-02] provoked a typical kneejerk reaction from the entrail-rakers with stock in the platform’s two controlling companies – Carlton Communications and Granada Media – slipping on Tuesday by 4.29% (to £1.9725) and 1.48% (£1.1625) respectively.
But by 10.05 GMT today (Wednesday) Carlton shares had recovered to £1.9825 while Granada edged downward to £1.13.
The reaction of the market is puzzling, given that the growth in churn rate (from 23.1% to 24.9%) for ITVd’s most recent quarter was entirely predictable given the platform’s recent price hike. Not only is the current subscriber loss well within forecast parameters, the higher prices are expected to boost average annual revenues per subscriber by about £25.
According to the company, churn is likely to reach 30% before improving. At rival pay-TV operator BSkyB the churn rate, initially in the same league as ITVd, has now settled at 10%.
Data sourced from: BrandRepublic (UK); additional content by WARC staff