Wednesday 12 June 2013

Has ITV got its premium player pricing wrong?

ITV has released a new version of its ITV player for iOS, within which it offers an in-app upgrade for £3.99.

Some commentators are challenging the very notion that consumers would pay for ITV content.
 ITV Player Premium gives you:
  • Live streams of ITV3 and ITV4 (and Live Events stream)
  • No advertising around catchup programmes.
Pricing is complicated but the nub of it is that it communicates value to the customer. The consumer will view the £3.99 price tag as consisting of its two elements: ITV3 and ITV4; and 'no ads'. The consumer will attach some value to each element.

ITV3 and ITV4 have very low viewing figures: about 2.4% and 1.8% respectively, including +1 channels. The comparable figures for ITV and ITV2, are 17.0% and 2.9%. Put simply, ITV3 and ITV4 are of little value, for some zero value.

Therefore, consumers will have to consider whether they will accept paying for ITV3 and ITV4 in addition to paying to remove ads. ITV says the value of removing ads is less than £3.99. What matters is if the consumer decides that removing ads is worth more than £3.99.