As we enter the television negotiation season in earnest, so the media-owner posturing begins. The travelling roadshows are on their way to a media agency boardroom near you soon.
These presentations dazzle with an array of impressive statistics and claims about the year gone by. More impressive statistics, interspersed with clips of next year’s ratings hopefuls, are then followed by the inevitable revenue growth forecasts for the following year. In true salesman’s tradition, it transpires that no TV station has ever had a bad trading year!
CIA UK has made forecasts for 2001, looking at TV revenue by channel/station this year compared to the individual channel/station’s own forecasts for 2001. The two make contrasting reading.
While CIA is forecasting total TV revenue growth of about 4.6 per cent (down from 6.7 per cent this year), the aggregate of the individual channels/stations’ own forecasts suggest an 8.6 per cent growth. This equates to a &£132m difference in TV revenue demand.
At this point, it is worth pointing out that only six weeks ago Granada Media Group (GMG) downgraded its 2001 profit before tax forecast by 21 per cent – from &£321m to &£256m – due to ITV advertising softness. It also stated that trading in the first half of 2001 is likely to be slow.
Despite the extra minutage granted by the Independent Television Commission, GMG downgraded its 2001 ITV advertising revenue growth forecasts from 4 per cent to 3 per cent – and this assumes ITV goes onto Sky Digital’s electronic programme guide in the second half of 2001. This dose of realism was treated seriously by City institutions, as the GMG share price fell by 15 per cent on news of it.
Next year’s TV trading climate is likely to be a tough one. Coming on the back of a storming first-half fuelled by the dot-com goldrush, the market since August has seen a dramatic downturn.
A slowing economy will certainly make things tough. Lower revenues from dot-coms, a car market in turmoil, together with falling packaged goods revenues (as some brands are forced off TV by the rising cost of reaching viewers) will contribute to a slowing TV market in 2001, with some stations undoubtedly seeing revenue decline in the first half of the year.
But it isn’t all doom and gloom. Total commercial audiences continue to increase, driven by the growth of digital satellite and cable penetration – and Channel 4 has much to be pleased about.
All this should contribute to very low TV inflation levels next year against most target audiences. Years of exaggerated sales presentations make hardy TV buyers a cynical bunch. However, with each negotiation season seemingly more important than the last, a degree of market realism from the media owners wouldn’t go amiss.
But it is ironic that, with ITV currently under attack on all sides, it’s the only network to have set itself realistic targets for next year.
Has any body seen a missing &£132m?
Ian Anders is TV buying director for CIA UK