Market Watch

UKTV Channels to Come Under Channel Four Sales

July 06, 2010

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Channel 4 Sales is to become the exclusive advertising representative for the UKTV portfolio of digital TV channels from January 2010, for ten years.

The UKTV portfolio consists of ten channels, several of them in the lifestyle and factual genres, some of them leaders in their categories: Watch, G.O.L.D., Dave, Alibi, Yesterday, Blighty, Eden, Home, Really and Good Food. All UKTV channels are distributed on Sky and Virgin Media. Dave and Yesterday are also available on Freeview.

Advertising inventory of the UKTV channels was until now traded by IDS.

The deal between Channel 4 and UKTV comes as no surprise. Following the sale of Virgin Media TV to Sky a few weeks ago, with Sky Media becoming the sales house for Virgin channels, UKTV channels were the only account still represented by Virgin Media's sales house IDS. That was bringing it below the critical mass to be profitable, with a staff of 100. IDS airtime sales amounted to an estimated £210m in 2009, of which approximately £130m for UKTV channels and £70 for Virgin TV channels. The departure of UKTV to Channel 4 means IDS will close as an independent sales house.

The disappearance of IDS will increase further the concentration of market share around the main three selling points: ITV, Channel 4 and Sky Media. Taking into account the end of IDS, the big three now account for 90 per cent of TV airtime trading.

The only remaining TV ad sales houses are now the small in-house Turner Media Innovation, and Five. Five still controls seven to eight per cent of the UK airtime market. The Five Group is an advanced stage of being sold by its owner RTL. Whether or not the Five group itself finds a new owner in the next few weeks, its audience share and advertising market share might now lack the scale to recoup its costs against the bargaining power of big media-buyers and much bigger competitors. It is therefore likely that Five channels will, too, come under the umbrella of one of the ?big three' selling points, which will then account for nearly 100% of the market. This is bound to foster further inflation in the market.

Find Out More > iSuppli | Screen Digest Broadband Advertising Intelligence Service

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