U.K.’s Carlton posts $395 million loss

Decline attributed to digital TV costs, low ad revs

LONDON – Carlton Communications has posted a £278 million ($395 million) loss in its interim results to March 31, compared to a profit of $38 million for the same period last year and attributed to digital TV costs and a 6% decline in advertising income.

The ITV company’s sales were up 6.4% to $1.63 billion.

Spending on ONdigital, Carlton’s troubled joint venture pay TV platform with Granada Media, the other big ITV company, was $119 million, up from $98 million.

Carlton said it expected to invest an additional $285 million in ONdigital over the next three years and that the platform, which is being rebranded as ITV digital, will break even by 2004 with 1.7 million subscribers.

ONdigital currently has just over 1 million customers. Satcaster BSkyB’s SkyDigital has over 5 million and both NTL and Telewest, the U.K.’s cable operators, are fast approaching the 1 million digital sub mark.

Carlton described the downturn in ITV advertising as “cyclical” and pointed out that Britain’s biggest commercial web continues to dominate prime time with a 38% viewing share.