Cutting its 2022 advertising estimates for the broadcaster following conversations with media buyers, Berenberg said that demand seems to be dropping “quite sharply” for the final quarter.The analysts said that while the UK’s leading commercial broadcaster may benefit from its coverage of the World Cup in Qatar, this will fail to offset underlying decline in demand. The bank forecasts a 1.8% decline in full-year advertising, a worse performance than the 0.3% drop previously forecast.In terms of ITV’s overall top line, Berenberg said that the drop in ad sales would be partly offset by a favourable US exchange rate boosting the broadcaster’s US Studios unit, but noted that the ad impact would be “many times higher” than the margin on studio revenue.Berenberg said that its media buyer contacts appear to “know relatively little” about the content likely to appear on upgraded on-demand platform ITVX, set to launch shortly. It noted that ITV’s service will arrive in “a crowded market” with Channel 4 ahead in terms of AVOD and new ad-supported tiers from Netflix and Disney+ likely to intensify competition.The bleak assessment from Berenberg, which has previously said that consensus expectations around ITV are too high, comes despite TV broadcasters across Europe showing some resilience in the race of a rapidly weakening economy and declining viewership.Berenberg said that the “relative strength of TV ad spend is not sustainable”, and noted that audience demographics told their own story. Germany’s ProSiebenSat.1 and international broadcaster RTL have both been hit by deteriorating circumstances.
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