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ITV’s revenue set to plummet this summer as Simon Cowell talent show formats run out of gas

Everybody knew that ITV faced a hard summer after last year’s recovery – no World Cup and a UK advertising market being buffeted by little or no growth with the prospect of worse to come as coalition government public sector cutbacks and higher taxes start to bite.

But the biggest UK commercial broadcaster’s prospects look much worse than even the pessimists had feared as media buyers are now expecting revenues through May, June, July and August to be down a minimum of ten per cent each month compared to 2010.

One reason is increased competition from ever-popular online plus a revived Channel 4, BSkyB, which is pouring £1bn plus into its annual marketing budget and Sky-only channels like Sky Atlantic, Richard Desmond’s Channel 5 which has just brought Big Brother and the increasing strength of other digital-only channels like News Corporation’s Star TV which is picking up an ever-larger share of the important Asian market in the UK with its Bollywood-rich programming.

For ITV even to attempt to compete on all these programme fronts it depends on a very small number of high rating programme formats, chiefly Simon Cowell’s two talent shows, the X Factor and Britain’s Got Talent.

But Cowell has taken himself off to America the launch the X Factor over there and so is not appearing on the new series of Britain’s Got Talent, neither is new CNN talk show host Piers Morgan.

But the new series of BGT is foundering with replacement judges David Hasselhoff (of Baywatch and bizarre behaviour fame) and contrastingly mild-manned comedian Michael McIntyre failing to cut the mustard alongside stay-at-home Amanda Holden. The show is losing about one million viewers every time it goes out and the producers are searching desperately for a new Mr Nasty to take over from Cowell.

Cowell also has no plans to reappear in the early stages of the X Factor when that comes back in the winter, which is causing complete panic at ITV.

Media buyers, in the meantime, are having a whale of a time kicking the stuffing out of ITV’s new sales team headed by former radio executives Fru Hazlitt and Simon Daglish. New sales director Kelly Williams from Channel 5 isn’t scheduled to arrive until August.

The new trio replaced long-time sales director Gary Digby and his team who were fired earlier this year even as ITV reported that its revenues had reached £2bn again and it recorded profits of £286m.

In the current circumstances Digby & co would have been out there threatening media agencies with all sorts of blood-curdling consequences if they failed to support ITV in its hours of need.

The new lot, under the tutelage of CEO Adam Crozier and chairman Archie Norman, are charged with making the business of selling ITV more ‘consensual’ and boosting online revenue so the company can evade the boom and bust of the airtime market.

Alas, they may find that London’s hard-bitten media agencies don’t do consensual and that ITV has a mountain to climb to generate anything like its airtime revenues from online.

This was alway predictable. The implosion of the Simon Cowell talent show franchise was not, until he chose to go the US.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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