ITV trouble ads up
Blurb slide latest bad news for British web
Ad revenue is set to fall by 8.9% this year, according to a report released Monday by media buying agency Zenith Media.
Zenith predicts that overall TV advertising will decline by 4.7% in 2001, and advertising across all media will drop by .8%.
Channel 5 is heading for an ad dip of 3.4%. Only Channel 4 will finish ahead, with a rise of 1.9%, although that is much weaker than the niche web's rise last year of 8.1%.
The report confirms the distress signals that the leading ITV companies, Granada and Carlton, have been sending out to shareholders and thegovernment.
A letter to Prime Minister Tony Blair from Granada chairman Charles Allen and chief exec Steve Morrison was leaked to the press this weekend in which they warned that ITV was facing disaster because of delays in allowing the web to merge into a single company.
ITV chiefs were disappointed that the newly re-elected government did not announce proposals to relax cross-media ownership rules when it unveiled its legislative program last week (Daily Variety, June 20).
In the letter to Blair, Allen and Morrison said Granada's collapsing share price makes the company vulnerable to foreign takeover and that it already received several approaches from European media groups.
Earlier this month, Granada announced that its ad revenues had fallen over 10% in the nine months to June, and predicted another decline of up to 18% in July. Its share price has halved in the past 12 months.
ITV chiefs are trying to pressure the government not only into loosening ownership rules but also into giving more support to ONdigital, the struggling digital terrestrial TV platform co-owned by Granada and Carlton.
The letter suggests that if Granada were taken over by a foreign company, the new owners would probably abandon ONdigital, slash ITV's program budget and cut jobs.
