ITN has begun the arduous task of persuading sceptical media buyers that its new 24-hour news service will be a valuable advertising medium.
The free-to-air news service, which launches in July, is to be funded entirely by ads and will undercut Sky News, which charges 40p per home connected. ITN declined to reveal whether it had decided on a name for the channel.
David Sanderson, head of sales at the new channel’s sales house Carlton Digital Sales, last week began a round of presentations to promote the channel to media buyers. He is expecting to run eight minutes of ads an hour for brands, such as financial services, cars and news papers, aimed at ABC1 viewers.
The new channel will launch in a market already dominated by Sky News, which is watched by 30,000 viewers at any one time. Up to 113,000 watched the Nato invasion of Kosovo, while 2 million tuned in for the outcome of the Louise Woodward trial. BSkyB claims BBC News 24 attracts about a quarter as many viewers.
Sanderson needs to overcome cynicism in some industry quarters, because some media buyers see it as a me-too product with few unique selling points. One media buyer says: “Well, thank you very much ITN… but why?”
Andy Zonfrillo, head of television buying at MindShare, says: “At this stage, there seems to be nothing new in what it offers consumers.”
But Michael Jermey, launch managing director of the new service, argues it is a content category that is still under-served: “There are fewer news channels than in any other category – just look at sport, with Sky Sports One, Two and Three, and Eurosport.
“In general news, there are only two channels, and only one is selling ads. It will appeal to advertisers because it is different to Sky News.”
Jermey highlights its strengths, saying it will feature well-known news presenters – these could include Julia Somerville and John Suchet – and benefit from ITN’s brand values of professionalism, trust and user-friendliness.
He says that because the channel is launching with entirely digital technology, and can make use of ITN’s news network, it will have lower start-up costs than its rivals.
Industry estimates suggest that, while the BBC spent &£53m launching News 24 and BSkyB splashed out &£30m on Sky News, ITN may be able to launch its service for less than &£20m.
That’s all very well for ITN’s five shareholders – comprising ITV owners Granada, United News & Media and Carlton as well as Reuters and the Daily Mail – but brand owners could discover that only a few people watch it.
Jermey says: “We don’t need an enormous audience to be a commercial success because the production costs are lower and we can use the content for other programmes.”
Still, ITN has high hopes for its viewing share. Carlton’s Sanderson expects it to achieve 45 per cent of the news audience in homes with access to Sky News, and 60 per cent where News 24 is the only competition.
ITN has an advantage over BSkyB which has left the Murdoch-controlled organisation fuming. While ITN will be able to broadcast on Sky Digital through the Astra satellite, the cable companies are not obliged to take Sky News in all their franchise areas. Its coverage of cable homes is just 72 per cent.
So, in many areas ITN’s service will be the only rolling news channel that takes ads – an exclusivity that could stand it in good stead.
A Sky spokesman says this is “grossly unfair”, adding that “anyone who wants to can broadcast through satellite digital – we welcome competition. The problem comes when cable channels chuck us off.”
Jermey says: “We’ll be on Astra on Sky Digital, we’ll be in NTL and Cable & Wireless homes, and on ONdigital – so anybody with a digital terrestrial set can view us.
“We are also negotiating with Telewest. Some 12 million viewers will be able to see the channel.”
This contrasts with 6 mil lion potential Sky News viewers.
The new channel will broadcast news, sport and weather programmes every 15 minutes, and will not feature the extended interviews and other programmes associated with its rivals.
However, it is difficult to see how ITN’s 24-hour channel will hold on to viewers. Jermey argues that strong content will keep viewers watching.
NTL has a stake in the service and will introduce an interactive element, putting it in direct competition with BSkyB’s plans for an interactive service: Sky News Active.
One buyer says: “The cynic in me says it is not a ratings winner. It is a public relations stunt to make up for moving News at Ten – to pacify the outraged masses.”
Naturally enough, Jermey rejects such reasoning.
The ITN launch is unlikely to expand the market. As TV companies pledge to offer news whenever people want it, they will have to make do with a diminishing share of such audiences. Brand owners targeting hard-to-reach upmarket viewers – who are often found snuggled up in front of BBC2 documentaries – have precious few others places to reach them.
ITN appears to have found a gap in the market, but it may turn out to be a small one.