International Marketing

By:Michael LamAndy LoBJ McCahillJeremie Mairesse

ITV AMERICA – A greater view

Table of Contents

ITV - A brief history

Country Selection - USA Expansion

Competition

Launch & Promotions

Conclusion

ITV – A brief history

ITV – Independent Television Legal name is channel 3

ITV launched in 1955 after the 1954 television act – which allowed commercial television.

1990 Broadcast Act allowed regional companies to merge

1994 Granada buys LWT 2000 Granada owned 6 regional licences and Carlton

owned 5 This led to 2003 Communications Act – Competition

Commission approved merger plans. ITV plc is the name of company that owns the

licences to broadcast in the 11 regions

ITV Portfolio

The ITV CompanyITV1 is the current branding given to the network by ITV plcITV plc is listed on London Stock exchange – is a constituent of the FTSE 250 Index2008 Figures:

Revenue: £2,029 million Operating Income: £2,647 million Net Income: £2,553 million

The channelsITV1Main channel on terrestrial televisionFour biggest entertainment shows on commercial television

X-factor, Britain’s Got Talent, Dancing on Ice and I’m a Celebrity.

Britain’s Got Talent 2008 final – 13.9 million viewers and 56% share.

ITV Portfolio

Digital Channels

ITV2Aimed at young viewers

Biggest UK digital channel in terms of adult share of commercial impacts

5.8% share of aged 16-34 viewers - second to Channel 5 which has 6.6% share.

ITV3Aimed at older audience

ITV4Aimed at males and sports viewers

ITV SWOT

Strengths

The strongest commercial network in the UK in terms of audience figures and advertising revenue

Large proportion of programming is in-house produced

A commitment to content with investment and retention of creative talent.

Weaknesses

Has suffered slightly during economic downturn with decline in advertising revenue and overall revenue.

Focuses very heavily on one type of programming (reality TV and Talent shows)

ITV SWOT

Opportunities

Has a long term strategy to expand globally and already produces programmes for other areas

Has developed strong inroads into online technology and can expect it to become significant part of business in the future

Can use low cultural distance between US and UK in terms of language barrier and entertainment tastes

Can use market strength to attract new advertisers and sponsorship  Threats

Market and economic conditions as well as broadcasting regulation rules can affect cash flow

Failure to understand foreign market during global expansion leading to commercial and creative loss

Americans can be culturally resistant

Trial Expansion

ITV studios has taken steps towards international expansion Produces and sells programmes for broadcasters in many territories

including: US, Belgium, Hong Kong

Recently penetrated Singapore’s TV market

Global content revenue was £622 million in 2008 – a growth of 10%, increasing a further 11% in 2009

Online revenue has growth rate of 8% in 2009 Example: Germany

ITV Studios is known by its former name Granada when it produces programming for foreign territories

Successful German versions of “Come Dine With Me” (“Das Perfekte Dinner”) and “I’m a Celebrity”

Has also a bought 51% stake in Imago TV – a German producer

Matrix Factors: Market Size

Population (2009 estimate): 307,966,000 (3rd Worldwide) GDP: $14,441 trillion (2008 estimate)

99% of American households have a TV set Children watch TV 4 hours/day average => 18,000 hours by the time they graduate 

Number of TV sets per U.S. household average: 2.24U.S. Homes with three or more TV sets: 66%Americans who pay for cable TV: 56%

For wired households, the US still holds a lead over the UK in broadband penetration of 62.5% vs. 55.7%

SCORE: 5

Matrix Factors: Market Size

Additional Factors

Buying Power (Score: 5)

Household Income Average: $46,32620% Top from $92,000+

Buying Structure (Score: 5)

Average US hour of TV had 13:54 minutes of commercial messages in 2009

Average 30-minute US show now includes 8 minutes of advertisements

UK average of 7 minutes per hour, with limits of 12 minutes for any particular hour

ITV ownership of production and programs equal limited licensing fees

Additional Factors

Market Growth (Score: 2)

Stagnating: GDP growth: 0.4% in 2008; -0.7% in 2009 

Rise due to broadband and satelite services: 

• Broadband is one of the fastest adopted products/services in the history of this country  

• The DSL and cable operators have been aggressively pushing the market over the past year and half

Country Risk/Openness/Economic Risk (Score: 4)

Politically stable 

Free market economy

Recovering from economic crisis 

Competitive Strength

Competitive Strength

Competitive Strength

Supplier Power, Buyer Power and the threat of substitutes are in our advantage. 

Barriers to Entry are high but we have strong knowledge and capital to pierce through. 

Rivalry is by far the toughest, but if we target our market right we can still find the right niche-market.

UK content serves as a point of differentiation

Only one other British channel available in US market

SCORE: 3.5

BBC America

Only other fully British channel operating in US market

Launched in March 1998-now reaches over 65 million homes on both satellite and cable

Originally aimed at British citizens living in US 

Uses Video-on-Demand system as well as iTunes TV store for additional content 

Programmes currently include: Doctor Who, Dragons' Den, Robin Hood, BBC World News, How Clean is Your House, Cash in the Attic, and Skins

BBC America

“From award-winning drama, mind-blowing mysteries and outrageous comedies to trend-setting makeovers and world-renowned news programs, BBC AMERICA pushes the boundaries to deliver high quality, highly addictive and eminently-watchable programming to viewers who demand more.”

Challenges:

Inexperience with ad sales

Unclear channel identity without target demographic in mind

Programming does cater to an older audience which in America tends to be more xenophobic than youth

Difficulty creating loyal viewers with scattered programming

Most programmes need severe editing to fit into standard timing format due to ad space

Measurement scale development

1Very poor

2Poor

3Mediu

m

4Good

5Very good

% Weigh

t factor

Result (gradin

g x weight)

X 35 175

X 15 30

X 20 100

X 20 100

X 10 40

100 445

A. Market attractiveness

B. Competitive strength= 3.5

Market size

Market growth

Buying structureBuying power

Country risks

Total

Market attractiveness = 445/100 = 4.45

The market attractiveness/competitiveness

strength matrix

High 5

4

3

Low 15High

4 3 1Low

Invest/grow

A countries

C countries

Harvest/divestcombine/licence

B countries

Selectivitystrategies

Dominate/divestJoint venture

Market/countryattractiveness

Competitive strength

CommunicationsAdaptation

Common language allows for programmes to transition easily with minor editing for additional ad space

Programme selection based upon cultural relevance in US

Much of the network remains standardised apart from new promotions

Advertising has to change because most is done on ITV Channels which have a large audience in the UK

New channel won’t have built in audience so channel and shows must be promoted elsewhere

British-themed ad campaign utilises standardisation

Launch

Billboard Advertising

Posters

Subway Ads

Taxi Ads

Cross Channel Promotion

CBS: One of America's oldest television networks, launched in 1941

Launched 6 channels in the UK in November 2009

“There’s latent awareness of the CBS brand, and that it stands for quality US entertainment… Our job is to build that out.” 

Offer to promote CBS's UK channels through the ITV channels in the UK, in exchange for promotion on CBS channels in America.

Recent Network Developments: Comedy Central launched April 2009 

Cable broadcaster Scripps Network Interactive are looking to launch Food Network throughout Europe in 2010.  

Also approach E! and Bravo which share similar core audience to ITV America                                                                    

Internet Advertising

Huge growth over the last few years despite the economic downturn

YouTube recently signed deal with Channel 4 allowing online full-length programs

There would be no fees for content, instead revenues generated by advertising on the website

"The shows section of the site will make it easier for users to discover videos from the biggest names in British broadcasting, and help our content partners

reach new audiences and generate new revenues"                         

Patrick Walker, YouTube's video partnerships director

To succeed in American launch, use of Youtube and ITV player must be maximised

ITV Personalities

Jack Osbourne

Cheryl Cole

Colleen McLoughlin Rooney

Harry Hill

Katie Price

Simon Cowell

Piers Morgan 

Dannii Minogue 

Peter Andre 

Ant & Dec

Holly Willoughby

Fearne Cotton

Press Stops

TV

The Tyra Banks ShowTV Guide Network The Ellen ShowJimmy Kimmel Live!Bonnie Hunt ShowLate Late ShowChelsea LatelyExtraThe SoupThe InsiderEntertainment TonightGood Day LA

Print/Online Publications

OK! MagazineSharon WaxmanPeople MagazineThe WrapUS WeeklyDeadline HollywoodLife & StyleThe Daily BeastVanity FairHarper's BazaarHuffington Post

Sample Press Tour

Colleen McLoughlin on The Tyra Banks Show to discuss body image in relation to her Real Women program

Harry Hill guest spot on sister program The Soup

Katie Price interview and photo spread in OK! Magazine US edition

Jack Osbourne interview segment with Chelsea Handler on Chelsea Lately

Cheryl Cole on The Ellen Show with possibly CD release tie in

Topshop Tie-In

Topshop launched their American flagship store in March 2009, New York

Market segments targeted by ITV America and Topshop are similar

UK celebrities have been known to do billboard campaigns for many fashion brands in Britain, why not the USA?

The British Invasion / The British Are Coming

Offer Topshop advertising space on the new ITV America channel, in exchange for promotion through Topshop and it's clothing line

Conclusion

Much of the network remains standardised apart from new promotions

Possible expansion into additional US TV markets

Possibility to create programs wholly by ITV America

Possibility to extend ITV channel line up targeting other demographic

Any Questions?