UK's ITV Slashing Online Properties After Huge Loss
This story was written by Robert Andrews.
ITV (LSE: ITV), the UK's leading commercial TV outfit, will try to sell some of its well-known online brands and cut hundreds more jobs in yet another radical cost-saving plan, after chalking up a 2.7 billion ($3.78 billion) loss for 2008. Actual losses were less, but the channel operator and producer took a 2.69 billion ($3.78 billion) writedown on its broadcast and online operations to finish at one of the worst showings in British media history.
In response, ITV will try, "when the time is right", to sell Friends Reunited, the once-mighty school reunion-centric social network that it bought for 120 million in 2005 (now $168 million{) but which has been allowed to whither on the vine as rivals like Facebook have prospered. It will also attempt to sell Scoot, the local business search directory it bought for 3 million in 2006 ($4.2 million) but which has been pushed off the radar by the likes of Yell.com and Google.
ITV will try to sell SDN, the company that manages a portion of the UK's digital terrestrial TV spectrum, which it bought from S4C, United News & Media and ntl for 134 million ($188 million) in 2005. And it will shut ITV Local, its much-heralded network of regional TV sites, as an independent business.
The company now plans to make a further 575 million ($806 million) saving and cut 600 jobs by 2011, on top of the 1,000 cuts and other savings announced as recently as September. ITV has been suffering from TV audience fragmentation and regulation that pegs to audience share the amount it can charge for ads. The UK's economy, now in recession, has finally tipped it over the edge - ad sales are down four percent from the year before but are forecast to be down 17 percent by March. ITV is now retrenching to its core TV proposition, but it will be challenged to make meaningful returns from the online properties - both Friends Reunited and Scoot have been overtaken by more popular rivals. More in our story on paidContent:UK and our report from ITV's analyst meeting...
By Robert Andrews