ITV Expects £60 Million For Friends, Admits It Failed To Grow

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ITV Expects £60 Million For Friends, Admits It Failed To Grow

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ITV’s online director Ben McOwen Wilson uses a Guardian.co.uk interview to talk up talk up reasons prospectors might fancy on-the-block Friends Reunited. The price? “Well north of £60 million”, Wilson reckons. ITV (LSE: ITV) has made £57 million revenue from Friends since buying it for £120 million in 2005, according to previous earnings - so, at that price, it will only be making its money back.

He’ll be lucky - despite its premium subscription model historically bringing in the bulk of ITV’s online revenues (ITV.com pulled in £35 million over the same period), Friends’ cash-generation plateaued in 2007 and is now falling after ITV switched it to ad-supported, as our chart below shows. Wilson adds: “We’re also selling around five core components of data and add-ons that advertisers can buy back.” It’s not clear what this means, but: “In a market where CPT [costs per thousand for user data] on Facebook are sub-five cents, some of the Friends inventory is in the £2-£3 level.”

Wilson rejects critics’ arguments Friends, under ITV, didn’t keep apace with the social networking revolution happening around it: “I don’t accept the charge that ITV didn’t see social networking coming. Friends made its money providing a payment barrier around access to real personal data, but after Facebook people were prepared to put personal data online – sometimes naively large amounts – on a real-name basis; that was a … social shift that took everybody by surprise.”

But Wilson admits to “a failure of focusing on profitability rather than growth”. “But will Facebook or YouTube ever be profitable? ... The reason for selling is to do with the need to get cash into ITV, and an asset that is considered non-core but profitable is a readily identifiable source of cash.”