Granada and Carlton will launch a new ITV Sport channel and rebrand their flagship channel as ITV1.
UK media companies Granada and Carlton have suffered this year due to a sharp decline in TV advertising expenditure. Their digital terrestrial pay-TV service, ITV Digital, has also been a financial strain. Despite its costly strategy of providing free set-top boxes (STBs), growth has slowed leaving its one million subscriber base dwarfed by Sky Digital’s five million.
However, they still believe in ITV Digital’s prospects. Having rebranded the service from its former name of ONdigital to capitalize on the ITV brand name, they will launch a premium digital channel, ITV Sport, in August. They will also rename their flagship ITV channel as ITV1, with the intention of driving awareness of ITV as a multi-channel provider. While these moves could help the companies build and preserve the ITV brand, securing their considerable investment in ITV Digital, it will require a shift in strategy.
The pay-TV operator should associate itself more with premium content and channel brands, as Sky Digital has with channels Sky One, Sky Sports and Sky Movies. However, to avoid causing confusion, ITV must make sure it differentiates its analog channels, its digital channels, and the digital platform.
Boosting uptake of the digital platform will also require a move away from premium subscriptions, as Sky Digital has built an unassailable lead in premium pay-TV. By concentrating on the additional channels available free-to-air, and potentially increasing the number provided, ITV Digital could attract a primarily free-to-air audience and target it with individual channel subscriptions and pay-per-view content. Giving these customers free STBs will not be viable, but it would be unwise to rely on their purchasing expensive integrated digital TVs either. ITV Digital should instead give them an STB purchase or rental option.
Yet this strategy will only be successful if consumers fully understand the offering and the available content is sufficiently compelling. ITV Digital must, therefore, position itself as the digital offering for the masses, easy to understand and providing something for everyone, as ITV itself has always been.
