Profits improve for ITV as Crozier announces HD deal

The broadcaster reports a £97m profit - plus a deal to launch HD versions of all its channels.

by
Last Updated: 23 Aug 2011

Things seem to be looking up for ITV. The broadcaster has reported a pre-tax profit of £97m for the first six months of the year – an impressive turnaround, given its £105m loss during the same period last year. New chief exec Adam Crozier, though, doesn’t think it’s enough. Describing his organisation, without much originality as 'not fit for purpose', he has announced plans to launch HD versions of all its channels as part of a pay-TV deal with Sky. Is it a clever move by Crozier to tap into the burgeoning subscription television market, or is he doing pulling a Murdoch, locking content behind a paywall, never to be seen again?
 
The new figures represent a partial recovery for the broadcaster, whose revenues plummeted during the recession. Now, though, they’re up by 18% on the same period last year. Apparently, June was a ‘particularly strong month’ – no doubt thanks to the World Cup. (Although the deeply misguided decision to use low-key couch potato Adrian Chiles as its main presenter for the football surely meant ad revenue didn’t quite reach its maximum potential…).
 
But it’s not universally good news for ITV. Despite the World Cup (and the never-ending cycle of lobotomising talent shows like The X Factor, Britain’s Got Talent, American Idol, ad infinitum), all the ITV channels lost viewing share. Crozier, (who, as the former chief executive of Royal Mail, knows a thing or two about trying – if not succeeding – to turn a business around in a difficult market) has acknowledged that the global TV market has changed ‘beyond recognition’ over the last 10 years.
 
As a result, Crozier has launched a five-year plan to turn the broadcaster around entirely. His message is clear: there may have been little growth in TV advertising, but there’s plenty of interest in pay-TV. As a result, he’s planning a paywall offensive: while ITV1 HD is already available on several services including Sky, Freeview and Virgin, ITV2 HD will launch in October, while ITVs 3 and 4 HD will launch ‘shortly afterwards’. Crozier also confirmed plans for a, let’s face it, much-needed revamp of GMTV. As of September, the show will be known as Daybreak.
 
While its foray into pay-TV may be encouraging, commentators aren’t holding their breath. After all, it’s not ITV’s first attempt at putting its content behind a paywall: its first experiment was a pay-TV platform which launched as ONdigital in 1998, was rebranded as ITV Digital in 2001, and disappeared in a puff of smoke in 2002, leaving ITV shareholders £1bn poorer.
 
Still, with pay-TV all the rage at the moment, could this be the start of a shift towards subscription models? Stay tuned to find out…

In today's bulletin:
Lloyds smashes forecasts with £1.6bn profit - but challenges remain
Prices up, demand down: Next paints gloomy picture of our prospects
ASA rumbles BT over its big bang ad
Profits improve for ITV as Crozier announces HD deal
Letters from Malawi: The downside of mobile phones

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today