ITV to charge as profits recover

3rd Aug 2010 07:14

New ITV chief executive Adam Crozier has unveiled a five-year transformation plan for the embattled TV broadcaster involving a move into pay-TV to halve its dependence on advertising.Crozier also revealed a sharp upturn in ITV's financial fortunes over the past six months, as lower costs and a revival in ad revenues lifted turnover 8.6% to £987m in the six months to June. Pre-tax profits came in at £97m, compared with a loss of £105m last time, while underlying operating earnings jumped from £46m to £165m."The good financial performance we have reported today has enabled us to reduce our debt significantly but does not disguise the underlying challenges we face. We are under no illusion that ITV needs to change substantially," Crozier said. "For the past decade ITV has not faced up to the challenges presented by the rise of internet-based platforms, the continuing growth of pay TV and subscription services and the globalisation of content," he added."Over time we expect to move to a position whereby half of ITV's revenue base will be derived from non-television advertising sources and today we are announcing our move into pay television with the agreement to make HD versions of ITV 2, 3 and 4 pay channels on Sky," he added.In the half-year, ITV saw market share improve with net advertising revenue up 18% versus a market up 15%. NAR is forecast to be up around 15% in the third quarter, but after that the picture is more uncertain."Increasingly tough comparatives and economic uncertainty give us a cautious outlook for Q4 and 2011," Crozier added.The move into pay-TV confirms reports at the weekend that ITV was to unveil a change in direction, but observers noted that ITV's last attempt to target the pay-TV market through ONdigital and ITV Digital failed dismally.Standard versions of the channels of the new, paid for HD versions of ITV2, ITV3 and ITV4 will remain on the free-to-air platform.ITV also announced the launch of a new channel ? ITV 1+1 ? next year which will replay the main ITV channel an hour after the initial broadcast.