ITC says Advertisers to pay for audiences lost to BBC3

ITC says Advertisers to pay for audiences lost to BBC3

TOTP: BBC's youth appeal

The Independent Television Commission is expecting advertisers to pick up the tab for lost youth audiences following the anticipated launch of BBC3.

According to the TV watchdog, the launch of the corporation's new youth channel, which will go head to head with commercial operators for the 18 to 34-year-old audiences, will impact commercial revenues to the tune of between £7m and £23m annually.

In its submission on BBC3 to the Department of Culture, Media and Sport, the ITC states that commercial broadcasters should pass on the cost of BBC 3 to advertisers through airtime inflation.

"We assumed that the channels involved would be able to mitigate audience loss effects to some extent by increasing advertising prices," it said.

The DCMS is expected to announce its approval for a revised version of BBC 3 this month. However, commercial broadcasters have lambasted the ITC for its approach to the issue.

Far from being "manageable", as the ITC has described the impact of BBC 3, increased prices for youth audiences would see brands deserting the medium in favour of cheaper options, they said.

"It is sad that after all of the commercial channel's consultation the ITC thinks we can mitigate the loss of youth audiences by just pushing our prices up," said Channel 5 deputy chief executive Nick Milligan.

"The real immediate effect is that the price for young advertisers will go up artificially because the BBC has eroded our viewing share and youth advertisers might well refuse to pay this increased price."

One senior agency source added: "I can't believe there is a demand for another youth channel. The commercial sector won't sit there while prices go up but will take money out of the market."

The ITC stressed that an impact on commercial revenues will be minimal if the BBC sticks to the stated public service objectives of the new channel. The BBC has said it was committed to a schedule of about 90% of UK programming and 80% programming made specifically for the channel.

Meanwhile, the BBC's bid for the DTT licence - vacated following the demise of ITV Digital - is expected to emerge as the winner when the ITC unveils its decision tomorrow.

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