Advertising revenues at ITV's flagship channel will be down nearly 10% year on year in the first half of 2007, the company said today.
Media agencies believe this decline equates to about £70m of lost revenues, following on from the £200m lost at ITV1 over the course of 2006, when revenues were down 12.3%.
ITV1's 9.6% decline was worse than the 7.7% fall for the same period last year, although the World Cup effect boosted the 2006 half-year figures, making for a tough comparison.
It translated to a 5.7% fall across the company's family of channels and came despite a "stable" UK television advertising market.
In a trading statement ahead of its annual general meeting today, ITV said the contract rights renewal system, which pegs advertising rates to audience share, had dragged down ITV1's revenues.
The ITV1 channel's share of the TV audience continued to fall, ITV said, with ITV1's share of commercial impacts - the proportion of overall TV advertising seen by ITV viewers - down 6.2% to 32.6% in the 17 weeks to April 29.
Over the same period share of commercial impacts at the whole ITV family of channels went down 3.8% to 41.7%, buoyed by an 18% rise at the digital-only channels.
Media buyers said the figures could not be attributed to decisions made by the executive chairman, Michael Grade, who joined ITV in January.
"This autumn we will start to see the effect Grade has made," said the head of broadcast trading at media agency Carat, Azon Howie. "That's when TV advertising deals start to be negotiated.
"However, even then, he will have had little time to influence the programming schedule. But there is more confidence coming out of ITV and within ITV."
ITV also said its revenues from premium rate telephone services would be down around 20% in March and April, after it pulled the ITV Play channel amid a slew of allegations of irregularities in call-TV.
The broadcaster added that the level of revenue now being generated by ITV Play, which has been retained as a late-night programming block on ITV1 and ITV2, was running "at a significant reduction" to 2006.
"Concerns remain about when consumer confidence in this area will be restored," the company said.
ITV added that all its call-TV output had been cleared all in an internal review and that its procedures would now "comply with or exceed" regulations issued by the phone-line regulator Icstis.
But it admitted the controversy surrounding TV phone-ins had damaged its business.
"The poor execution of these services across the sector has reduced consumer confidence and is having a material impact on PRTS revenues," ITV said.
"ITV is committed to publishing the findings of the current independent review of PRTS in ITV programming."
Mr Grade said there was "a great deal more to do" to drive recovery at the business.
"We are taking steps to stabilise our core business and ensure future growth by reviewing the best allocation of our current resources," he added.
"In recent months we have managed to slow the rate of decline in share of commercial impacts and viewing share on ITV1 as we begin to see new programming from our commissioning team delivered on-screen.
"Encouragingly the airtime sales market appears less volatile than last year, and we remain firmly focused on the needs of our viewers and advertisers.
"Our goal is to create long-term value for our shareholders by exploiting our content on an expanding number of media platforms, both in the UK and internationally."
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