Pay-TV switch would boost ITV, say analysts

Author: By Nick Clark

The group has struggled in the downturn, as its model has suffered from the global collapse in advertising. Daniel Kerven, analyst at UBS, said there was little upside even after a recovery and “given ongoing structural pressures, we have suggested that it should consider migrating to a subscription model”.

UBS commissioned a consumer survey from Gfk NOP, a market research group, into pay-TV trends. The survey found that 24 per cent of non-pay homes would be more likely to subscribe if ITV 2, 3 and 4 were only available on Sky and Virgin, and up to 40 per cent when ITV1 was included.

The survey also found a third of households with terrestrial television plan to move to pay-TV “in the future”. UBS said the survey showed a “wider consumer acceptance of pay-TV” with subscriptions expected to hit up to 68 per cent, up from 60 per cent in previous surveys. Mr Kerven expects pay-TV “to eventually become the norm”.

The survey will come as a boon to subscription providers including BSkyB, Virgin Media and Top Up TV. “Despite the tougher economic environment, the intention of pay-TV customers to turn is lower than it was two years ago for both Sky and Virgin,” Mr Kerven said.

Sky recorded a 4 per cent rise in operating profits last year to £780m, with the strongest net growth in new customers for five years. It has also seen strong growth in its High Definition services, which attracted 1.3 million customers last year.

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