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TV strikes an upbeat note

10 October 2010

If you are looking for signs that the TV industry is pulling out of its two year recession, the past week provided plenty of them.

ITV demonstrated that it is enjoying a storming autumn - and proved the continuing pulling power of TV - with a huge peak audience of 13.8m viewers watching Saturday night’s first live final of The X Factor. It topped this on Sunday with a peak of 14.7m for The X Factor results show, while period drama Downton Abbey attracted over 8m.

Meanwhile, Channel 4’s new chief executive David Abraham was unusually bullish about the broadcaster’s prospects for 2011, predicting that C4’s ad sales would top £1bn. Hitting this symbolic figure, he admitted to a gathering of advertisers and agencies, would partly be achieved by C4 benefiting from YouView and the new UKTV sales contract.

Nevertheless, Abraham’s optimism stands in complete contrast to that of his predecessor Andy Duncan, whose period in charge was defined by the recession and his belief that C4 needed government support to keep it alive.

Elsewhere, last week's Mipcom programme market saw plenty of brisk business. Sellers reported that deals were being done at the market as broadcasters opened their chequebooks and stocked up on new content – in stark contrast to the caution that marked last year’s event.

In fact, there is a growing consensus that the outlook for TV industry is rather bright over the next few years.

Speaking at Mipcom, Marcel Fenez, the global leader of PwC's entertainment & media practice, delivered a very positive assessment of the TV business.

He argued that global ad spend – which plunged 12% in 2009 – would rebound over the next five years, increasing at about 4-5% on annual basis.

More importantly, he said that TV’s total share of ad revenue – currently around 35-36% of all advertising – would actually increase by 2014 to 37%. Crucially, he said it wouldn’t fall away in the face of competition from online.

Online would increase from 15% to 21% of total ad revenue. But this would largely be at the expense of print, particularly newspaper, advertising – and not television.

“People have talked about the demise of television – but we are a believer that that is absolutely not the case,” said Fenez.

Judging by the pull of The X Factor, a bullish C4 and a buoyant Mipcom, he’s absolutely right.

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