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3rd Mar '23 by Bobdylan

6 comments 525 reads

With the merger of Carlton and Granada many many years ago the newly merged company had to honour the existing trading agreements with advertisers meaning that they could not increase prices by that method.

As ITVx increases and more of these advertisers move more of their ad spend over they are subjected to new and higher prices ( in some cases double that from the terrestrial channels). Add on any subscription and it means that this part of ITV may be undervalued.

Taking away money and viewing from the terrestrial channels is not an issue. The base price on which deals are set is based on money divided by viewing levels. If these fall by the same percentage levels as an example then prices

I bought airtime from all the UK channels for MediaCom for 30 years.

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Bobdylan

Premium Member

6 comments

MiserableJacktPotato

3rd Mar '23

I've got Amazon, Disney and Netflix. I occasionally log into iPlayer for specific shows and even less often tune into ITV live for horse racing and odd events like the world cup. I can't think of anything on ITV that I'm missing. I haven't bothered with Britbox, Paramount, Apple TV - I'm tv saturated. Not sure what ITVx is meant to bring to the party.

Personally, I can't see any future for ITV as an advertising platform, same as print media really. Too little, too late, others already got there and do it better.

Metatron

3rd Mar '23

ITV 3 & 4 has reruns every day of classic British Itv tv shows that clearly must attract repeat viewers or younger viewers who might be curious about what life was like in Britain in the recent past .Given those shows have had an audience for many years they may continue to do so . I usually check out the first episode of every new series on BBC ITV CH4 CH5.Only ALL4 consistently gets me to the 3 rd episode but a recent ITV series that was good was Stonehouse .and the first episode of the new Series of Endeavour last sunday was excellent .

I used to hold ITV as a takeover target but sold because of how woke the current management is.20 years ago i used to support greater diversity on UK TV but it has gone completely over the top and now threatens free speech i.e if one wants a career in the media questioning if diversity targets are now dated is a career killer unless one gets lucky to land a job at GB News or Talk TV.

timarr

4th Mar '23

I used to hold ITV as a takeover target but sold because of how woke the current management is

Hi Metatron

Nothing wrong in woke, per se, given what the opposite is, but I agree with you that there's a fine line between being inclusive and restricting free speech. Driving alternative views underground doesn't stop them, it just means they don't get debated, and everyone loses.

However, in respect of ITV (LON:ITV), pretty much all media companies will have to be at the more inclusive end of the spectrum, given the nature of creative people. Focused news channels like GB News or Talk TV can cater for a very targeted audience but given ITV's PSB remit they have no choice but to be broadbrush, often bland and generally a bit meh. It doesn't matter what they do, someone will be unhappy.

As an investment ITV looks undervalued, especially if you break out the value of the back catalogue and ITV Studios. Their problem is the PSB remit, which means no one wants to take them over, and the Liberty Media stake, which makes potential purchasers wary.

On the other hand we have the Media Bill in which the government threatens to level the playing field between the PSBs and the streaming companies (having previously unlevelled it in favour of the latter). As such ITV may be allowed more advertising time per hour, which would help drive revenues a bit (and potentially a lot).

I hold a few (well, quite a lot for me), but it's going to take some action from either potential acquirers or the government to change the status quo.

timarr

MiserableJacktPotato

5th Mar '23

If your bull case is older people watching repeats as the young move to YouTube, Twitch and the like whilst the streaming companies take over from live broadcast tv, I’d say there’s not much of a bull case. It might take longer than print media, but aired tv is on a downward path.

The Boon Fund

5th Mar '23

I used to hold ITV (LON:ITV) and I found your thoughts interesting, Bobdylan! Especially the fact that they are in some sort of regulated pricing regime for the terrestrial ad spots? Do you have a link to somewhere that has all the details? Would love to peruse.

Unfortunately, I sold out of ITV a few months ago for a few reasons:

- Advertiser budgets outlook for 2023 to be muted, at best low growth, at worst a cut

- ITV Studios will struggle this year, as the big media companies reign in commissioning new content. Look at the news out of Hollywood; slowing shoot activity already

- ITVX is an inferior app, with inferior content, in a very crowded marketplace. Yes, it is free supported by ads. But Netflix has already launched, and it sounds like Disney and the rest will do so too soon.

- I always believed that for the same live programme, terrestrial ads brought in more money per viewer than digital ads in video. I might be wrong in the specific case of ITV; as I don't buy any ITV ads at the moment, but I do other video advertising in the company I work for.

Bobdylan

7th Mar '23

Boon, the Ofcom website seems to let you search for stuff from 2006 whilst the merger occurred in 2002 and the regulations to protect advertisers started around 2000 and took ages. It was widely accepted in the industry was that it was a high price to pay.

In those days deals were done on the basis of advertising budget was given against the population or sales in each of the ITV regions. Then it was on the split between Carton and Granada Sales Houses. Carlton had London Monday- Friday 1715, Midlands, HTV,South West and Granada had LWT, Granada, Scotland and South East and Ulster. Some of these may be the wrong way round.

After the merger and with one ITV sales house deals were arranged by the percentage of the budget split between ITV, C4,C5, Sky, IDS ( a group of much smaller stations like UK Gold).

Currently deals are done between ITV,C4, Sky , You Tube, Netflix, Prime etc. Finally they are looking at the whole pie. The more that ITV gets through VOD the better as prices can be more than double for certain audiences of which there are a standard 15.

Whilst the bulk of the advertising spend is still with the likes of P&G, Unilever, BT etc the newer advertisers are not protected from the original ITV merger agree but they also have a wider playing field in order to negotiate the best deals.

Finally the whole thing is complicated by agency deals where a number of advertisers are groped together and finally finally Group Agency deals.

Whilst not being Bob Dylan the whole transition from buying individual spots on 14 different ITV regions from Grampian to Thames with no C4 to where I got to before I left in 2009 meant that I had a very fulfilling career.

Changing the subject to streaming services and their subscribers, a pitch of salt is needed. I get Netflix’s for about an extra £2 a month though Sky for their top tier. Paramount+ free through Sky, Disney through Tesco vouchers and phone contracts, ITVX still free without ads from an old free Britbox account. and Apple+ from four free six months at a time offers. I know that from friends that if you cancel Now TV it half price or cheaper.

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Bobdylan

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