Teletext made good progress in the year, responding strongly to challenging market conditions following the onset of hostilities in Iraq. The conflict led to a further weakening of the advertising market. As a result revenues at Teletext were down 2% year-on-year as the travel industry, in particular, struggled with uncertain demand. However, initiatives taken by management enabled the company to return a profit that is up 5% on last year and enabled Teletext to continue to grow its audiences and considerably strengthen its distribution.
The travel sector remains the company’s principal source of revenue and Teletext is encouraged by the success its new services are having. Teletext Holidays, the company’s interactive service on Sky, is the most used travel service on satellite, attracting over two million viewers monthly, almost 13% of all Sky viewers. Teletextholidays.co.uk is consistently in the top three most visited travel websites, attracting almost 1.2 million unique users in July. As a result of the success of these services, more people than ever before are using Teletext, on analogue television, digital television and the web, to find great value holidays.
The recent success of Freeview prompted the company to intensify its efforts to increase the capacity it had at its disposal on this digital terrestrial television platform. As a result Teletext has been able almost to double the available capacity for the duration of its licence. Whilst the current generation of Freeview set top boxes lack the functionality and sophistication of the web, and indeed of Sky receiver devices, they will improve over time. The additional capacity that has been secured will allow Teletext to deliver a service of the highest quality on a platform of growing importance and in an environment where competition is moderated by capacity constraints.
In recent years the Teletext service has been available to viewers by pressing the ‘text button’ when watching ITV, Channel 4 or Channel 5. Whilst this was an exclusively analogue linkage, viewer behaviour is well established and there is a widespread expectation that this is how it should be on the digital television platforms. The company has now entered into an agreement with Channel 4 to provide the Teletext service via the text button on all Channel 4 analogue and digital television services. The duration of this agreement is that of Channel 4’s licence and the first such service Teletext on 4 has gone live on analogue, replacing the Four text service in October.
The Teletext on 4 services on Freeview, Sky and cable will follow in the next few months. The company is excited by the commercial potential of this arrangement and remains hopeful that it will form a blueprint for other such agreements.
Teletext’s mobile service is now available on all the major mobile networks and is delivering growth in both user base and revenues. In the twelve months to September almost 13 million messages were sent out to users of the service and, according to the mobile operators, Teletext’s service is one of the three most widely used proprietary information services on mobile.
In addition to these service developments, Teletext has continued to deploy the publishing tools and infrastructure it needs to offer advertisers a uniquely cost effective means of reaching consumers across a diverse range of electronic networks. This remains a core part of Teletext’s strategy and central to its commercial success.
In July 2003 the Communications Act obtained Royal Assent bringing to a conclusion three years of intensive consultation, lobbying and negotiation. Whilst there was little in the Act of significance affecting Teletext, there were significant changes relating to Independent Television News (ITN), a company in which the Group retains a 20% stake.
In particular the Act removed the ownership restriction on ITN and as a result that company may now, for the first time in its history, have a single owner. This is entirely appropriate given the decision to permit the merger of the two largest ITV companies, Carlton and Granada. Moreover in the course of 2003, ITN disposed of a number of non-core activities and is now a much healthier, more robust business, focused on building quality revenue streams. One such stream is the commercial exploitation of archive material and ITN has been appointed to market DMG Broadcasting’s unique British Pathe archive alongside ITN’s other archive resources. This arrangement has been in place for some months and early indications are encouraging.
In conclusion, despite almost unprecedented challenges in the advertising market in 2003, DMG Broadcasting’s television businesses have made good progress in attracting audiences and in developing their commercial position.