ITV tunes in to home shopping

Home shopping is poised for expansion. QVC’s sales figures highlight the medium’s potential profit, and ITV and Channel 5 are moving in.

The news that London-based Blueprint Productions is putting the finishing touches to a show scheduled to be aired on Yorkshire TV would normally be of only casual interest.

However, the fact that it will be a show based on a TV shopping format and will be sponsored by catalogue company Great Universal Stores has stimulated interest at the Independent Television Commission (ITC), the home shopping sector, and the rest of the ITV network (MW last week).

The TV shopping market is a lucrative, expanding sector. The UK’s only home-shopping channel Quality Value & Convenience (QVC) claims a turnover of 80m last year, compared with 37.2m in 1995. A tidy sum considering the 24-hour channel only goes out to 4.5 million satellite homes and has only 1 million regular customers.

Furthermore, the TV shopping market has potential in light of its link with the already established catalogue market. This is worth 7.5bn a year, and is dominated by five big book agency catalogue companies – Great Universal Stores, Littlewoods, Freemans, Grattans and Empire.

Observers say the deal makes sense for Great Universal because it would give the home retailer a chance to pep up its dowdy image.

Russell Pickering, director of sponsorship consultancy Media Dimensions, says: “If the show was a slick production based around fashion, it would appeal to 16 to 24-year-olds, which is a younger audience than the catalogues currently get. But to get this audience it would have to be on later than a daytime TV slot.”

Pickering adds: “It is wise for home retailers to get into the TV market now, because with digital and interactive TV there will be the possibility of buying straight from the TV.”

There are plans to bring home shopping to digital TV. It is no accident that one of the main shareholders in British Digital Broadcasting is BSkyB, which also owns 20 per cent of QVC.

However, ITV has wanted to get into this area for years but has been hindered by ITC regulations on sponsorship and direct selling on TV.

Blueprint Productions admits it has “an involvement” with Great Universal Stores, but both parties are keeping the show’s plans under wraps. This is probably because the ITC code on sponsorship was revised only two weeks ago and allows little leeway for terrestrial channels.

The ITV network is allowed sponsors for “how to” shows like cooking or DIY programmes, and that’s about it. Satellite and cable channels are allowed sponsors in the masthead of a show, as well as having greater freedom in terms of straplines and the amount of time advertiser credits take up on screen.

The ITC does allow sponsors to advertise during the commercial breaks of a show they sponsor. Observers add that although rival retailers are likely to steer clear of advertising in a sponsored show, this will not stop other advertisers from coming in.

Martin Lowde, commercial controller at ITV media sales house Laser Commercial Enterprises, argues that the ITC did not relax its code enough. He says it restricts the possibility of new forms of TV developing.

He adds: “The ITC should stop worrying about the deals put together to make programming happen. It should only concern itself with the quality of programmes. Home shopping on the network can be a quality production. I do not see this as necessarily being a daytime show. If you were trying to sell computers or sports goods, it would need to be later in the schedule.”

Lowde adds: “The ITC is giving competitive advantage to smaller players, but to develop a market you need bigger players to come in. The code, as it stands, will have to be revised in 18 months.”

However, others see TV home shopping as never being more than a niche activity on UK screens.

Clive Vaughan, a consultant at retail analysts Verdict Research, comments: “Sales are growing rapidly in this TV sector, and virtually all of them come from QVC, but they are insignificant compared with the rest of the home shopping market. The problem is viewers have no control over it. They can’t flip to the index and go straight to the item they want to buy. If you are interested in a lawnmower and have to sit through half an hour of items about jewellery you will get bored. That’s a general problem with most home shopping shows – they are boring.”

QVC, which has been the sole shopping channel in the UK since 1993, says it has been expecting the challenge. David Lake, marketing manager for the channel, says: “It would be inconceivable that another shopping slot or channel would not start up on the ITV network. There will be more channels, and that means more capacity.”

“We are defined as a retailer, not a channel by the ITC, and we see ourselves as competing against any other retailer, whether on the high street or in catalogues. Of course another TV operator would be a direct competitor, but that would not necessarily be a bad thing. It has been up to us alone to expand and educate the market; if we could share that role with another player, that could be good for both of us.”

All eyes will be on the Yorkshire TV show to see how far it pushes the format. Not only is the ITV network keen to ensure that home shopping is a regular feature of commercial TV, other channels are also understood to be looking at the possibility.

According to sources close to Channel 5, the fledgling broadcaster is considering TV shopping programming later in the year for its day parts, giving what was a niche market a chance to become part of the “modern mainstream”.

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