ITV is to launch a new pay-TV strategy, MediaGuardian can revealed.
Elements of the strategy are understood to include the launch of a new channel and a deal relating to high-definition versions of its channels.
ITV’s chairman, Archie Norman, and chief executive, Adam Crozier, are expected to talk about pay-TV as part of a wider plan when the broadcaster reports its half-yearly results next Tuesday.
In March Norman ruled out taking ITV2, 3 or 4 onto a pay-TV footing, saying it was “unrealistic” because pay-TV revenues would not outstrip income from advertising. But he added that there was a case for looking at looking at an altogether new channel.
According to industry sources, ITV intends to launch a new standalone channel brand that would be bundled as part of a package through pay-TV operators’ subscription deals. It is believed that the channel would target men.
“It sounds like it may target a Dave [UKTV’s pay TV channel] type audience,” said a source.
Another source said that ITV was also looking at announcing some form of pay-TV deal around high definition versions of ITV2, 3 and 4. It is not clear how this would work, but it is understood that the deal would not involve the standard-definition versions of ITV’s digital portfolio or the HD version of the flagship ITV1.
“BSkyB has ‘helped out’ Channel 4 and Channel Five [with HD channels on Sky] and are very keen on high definition over standard definition deals these days, that is true,” said a source. “They are looking to get to 50 HD channels [Sky has about 43 currently] by October.”
Analysts have called for ITV to look to develop a pay-TV offering to counter declining ad revenues and diversify the business.
BAML said that “advertising alone is no longer enough to maximise the value of ITV’s audiences”.
“While cultural change and better execution would clearly be welcome, it will not address the structural limitations of ITV’s free-to-air model,” said BAML in the report. “A wholesale model would involve ITV selling its channels to pay-TV retailers who would include them within their basic offerings taken by all subscribers.”
It added: “ITV would be able to tap into much larger, growing and less volatile subscription revenues, and would be transformed into a growth story, geared to the growth of pay-TV.”time.