Channel 5 can expect “boom then gloom” over the ten-year period of its licence, according to a report published by The Henley Centre today (Wednesday).
For while the commercial prospects for the channel in the first five years are “relatively easy to gauge”, the five years after that are much harder to assess, the report says.
“After 2001, potential applicants should be wary about making too many assumptions in a world that could have changed dramatically. Revenue in the second five years of the licence may not be sufficient to cover (earlier) losses…” The Henley Centre warns.
Commercial instability will be exacerbated by social, economic and cultural factors. These include the continued decline of TV audiences, the move away from mass media to personal communication, the anticipated introduction of “video-on-demand” from 1997 and continued competition from cable and satellite TV.
The Henley Centre has also published audience and revenue projections for the early years of Channel 5’s licence, assuming an autumn 1996 launch of a national service offering “innovative entertainment and feature films, but with a higher news content than other terrestrial broadcasters”.
By 1997, Channel 5 is predicted to secure a three per cent share of all TV viewing – rising to five per cent in 2000. Share of ad revenue is projected to be 3.4 per cent (£81m at present revenue prices) in 1997, rising to 6.1 per cent (£164m) in 2000.
Advertisers remain committed to a speedy launch. At last week’s TV95 conference Incorporated Society of British Advertisers director general John Hooper urged the Independent Television Commission to avoid delay in allocating the licence once the deadline for applications passes in May.
“We believe in TV advertising… the trouble is we can’t get enough of it,” he said.
Advertisers’ Channel 5 “wish list” includes “different airtime allocation and break patterns”, he added.
Columnist, background TV95, pages 19-21