Enders Analysis

Ofcom’s plan to review commercial airtime rules in 2010 with an emphasis on deregulation clashes with the Competition Commission’s provisional decision to retain the Contract Rights Renewal remedy (CRR) as it is, other than to extend the ITV1 definition to include staggercast and HD variants

The OFT has delivered its verdict on ITV’s request for a review and modification of the CRR remedy that the Competition Commission imposed as a condition of the Carlton/Granada merger in 2003

In delivering its verdict, the OFT has chosen to sit on the fence. After recognising both the merits of the ITV case and the continuing concerns of the advertising community it reiterated earlier recommendations for minor changes in keeping with the times, but otherwise left it to the CC to decide what changes to make

2010 marked the recovery of lost ground since 2006 as ITV outperformed the TV advertising market, which saw year-on-year growth of 14-15%, and delivered £40 million in cost savings as well as benefitting from a further £20 million reduction in Channel 3 licence payments

The short term outlook for continued advertising revenue growth in 2011 looks promising in spite of the risks of renewed downturn due to uncertainties about the economy and retail spend

Using a little understood provision of the merger rules, the government has asked Ofcom to take a look at the Sky stake in ITV, just in case the OFT did not come up with the right answer the first time round. As a result of the intervention, Ofcom will decide whether the share purchase reduced the number of separately managed broadcasters in the UK. Since this is almost exactly what the OFT is already doing, it is impossible to see how Ofcom could reach a different conclusion to the OFT. In this sense, the intervention has little point

We have revised our central case forecasts of total year-on-year NAR (Net Advertising Revenue) growth in 2011 from 5% to 1%, as the advertising outlook has progressively worsened since mid April

2011 is marked by a further round of consolidation in airtime sales and a number of noteworthy channel and programming changes

Channel 4 Sales, and above all its flagship Channel 4, appears the most challenged of the leading market players, while we expect the ITV group to continue to outperform the NAR market in the rest of 2011 and 2012

The Office of Fair Trading (OFT) has confirmed receipt of a formal request from ITV plc for a review of the Contract Rights Renewal (CRR) remedy and will announce its decision whether to proceed before the year is over

Last week Enders Analysis interviewed David Elstein. Elstein is leading a team attempting to put in place a new management at ITV in the event that the merger is allowed by the Competition Commission. This note carries his views on the remedies likely to be imposed by the Commission and also on the scope for cost savings and improvements in business strategy at the merged group.

The development of the Digital Britain infrastructure, introduction of tablets, increasing connectivity of TV sets and launch of on demand OTT services over the internet have greatly intensified interest in connected viewing and its impact on the traditional broadcast model No single source of audience measurement for viewing of long- and short- form video content across all screens yet exists, though current market data suggest that connected viewing occupies a c.

Year-on-year increases of 4% in total revenues, 13% in EBITA before exceptional items and positive net cash for the first time in seven years sees ITV much more strongly placed to handle future challenges post digital switchover

ITV continued to outperform the market by raising its share of TV NAR, whilst the early signs of revival in its content production business were particularly encouraging

Online still poses ITV the toughest challenges with regard to providing it with significant new revenue streams despite strong improvements in the audience metrics – an issue familiar to many