Does Grade have X Factor?
Michael Grade says that he鈥檚 found ITV in than he expected. But if that鈥檚 right, goodness knows what unspeakable horrors he actually anticipated.
On an underlying basis, pre tax profit in 2006 was 拢253m, down from 拢321m in the previous year.
Looking forward, ITV鈥檚 own television advertising revenues will actually be lower in the first three months of this year, because of a decline in its share of commercial impacts (a measure of how many people are watching) and the ghastly impact of Contract Rights Renewal (this is the framework for fixing what it pays for advertising that was put in place when ITV was created through the merger of Carlton and Granada).
However on a more positive note, the television advertising market may have stabilised: ITV expects a 0.5 per cent rise in total UK advertising (that for all broadcasters, not just ITV) in the first quarter of this year. But conditions are fragile, to put it mildly.
In no particular order of importance, these are the fairly fundamental challenges that confront Grade.
1) Extricate ITV from the middle of the life-or-death struggle between Virgin Media and BSkyB.
The ITV board has belatedly concluded that it鈥檚 not terribly comfortable with Sky owning 17.9 per cent of it. Not because Sky can micro-manage ITV on a day to day basis. But because it would have the power, through the votes attaching to its shares, to block any really big deal that ITV might want to do.
So if ITV actually wanted one day to merge with Virgin Media, which is far from impossible, well Sky could stymie that (based on the voting behaviour of ITV鈥檚 investors, ITV would find it difficult to secure the 75 per cent majority required if Sky were opposed to the deal).
ITV has raised its concerns with Ofcom and the Office of Fair Trading, which are investigating Sky鈥檚 ownership of the ITV stake. Sky won鈥檛 be delighted but probably not altogether surprised.
2) Restore viewer confidence in the pay-phone lines used in game shows and talent contests. This is one of the few revenue-streams at ITV that鈥檚 been growing, so it would be a disaster if recent negative publicity led some customers to stop voting for Tracy Starlette or her ilk.
3) Encourage ITV鈥檚 commissioners to take programming risks 鈥 even though the cost of a flop in terms of lost advertising revenue has escalated ever since the company implemented Contract Rights Renewal.
4) Cut bureaucracy.
5) Enlist advertisers and other television companies to support ITV in its campaign to persuade Ofcom and the OFT to replace Contract Rights Renewal with arrangements that lessen the sensitivity of ITV鈥檚 revenues to falls in viewer numbers.
6) Build up the newer digital channels and online businesses fast enough to compensate for the inevitable decline of ITV1 in a fragmenting media world.
7) Make a bob or three and keep smiling.
I'm 
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I think item 7 is common to every business and is not unique to ITV. Certainly it is what I try to do, although I'm doing better on the smiling than on the other part.
Ofcom has to do everything in its power to prise ITV from the clutches of Sky, especially after Skys recent behaviour towards Virgin Media.
That and actually make something worth watching.
Item 1 is the most important - it would be ludicrous to allow Sky to continue to own 17.9% of ITV.This is totally anti-competitive.
Sky is already trying to damage Freeview by closing down its FTA channels and is simultaneously holding Virgin Media Cable to ransome over Sky One etc.
Sky has had the monopoly of satellite TV in the UK for too long and it has been very lucrative with no PSB-type controls over the length of advertising slots etc and the benefit of the dual income stream from subscriptions AND advertising revenue.Hence its ability to to use its financial power to try and dominate ,if not control,the other broadcasting platforms.
Sky should be made to reduce its ITV share holding by 50% to 9% and may be Virgin Media could take the remainder.
A level playing field then.
What he needs to do is to produce some seriously good quality programmes that are going to get viewers like me and my family back to watching TV. The continual stream of rubbish - reality shows, soaps, crude comedy etc - is a real turn off.Take risks, produce good stuff and let the viewers rule.
I have a nagging urge to buy some ITV shares today. Am I mad or am I right?
The fundamental concern with ITV1 is the poor quality of its homogenised programming. Unless this malaise is addressed with urgency by introducing better quality, bigger budget programming offering greater innovation and variety everything else is purely cosmetic.
ITV have never been able to match the golden era of the 60's and 70's when they produced so many memorable entertainment shows. In truth, the talent no longer exists to be exploited but in Lew Grade they had a true pioneer of television. If ITV think Michael Grade has the same inspiration as his famous relation their trust is badly misplaced.
Perhaps they ought to look at their regional roots a bit more closely. Not necessarily something for ITV1 these days but perhaps a digital channel where the regions can showcase themselves again.
Does Michael Grade have the X Factor?
Perhaps, but only if he has the vision. I鈥檒l share some of it with you Michael but only just this once and in this part-time place of the good Robert Peston.
ITV1 is still by far the most watched commercial channel in the UK. ITV鈥檚 2 鈥 4 and the oddly estranged (but still loved it seems) member of the family, Men and Motors are
merely a nod and a wink to the temporary existence of special interest channels.
Putting aside the buying and mainly successful production capabilities of ITV (these will
naturally occur for a now established brand with a commitment to popular content), I will
focus on the flagship channel itself.
So, a little of the vision then. presently in the homes of the UK, people
look at two different screens, not normally both at once of course as using your PC at 7-30pm
on most evenings can seriously interfere with your necessary understanding of the timeline
and dynamic in Tracey and Davids tragic relationship on the cobbles.
Two screens, but only Michael because of the currently commercially required intensive production of hardware and components in the far east.
鈥淥ne screen world鈥 is coming and indeed has already arrived in a small but growing number of homes. The processor
will sat happily together with the receiver in its 鈥淲indowless鈥 box (you may surprise me yet Mr Gates but
the indicators are you鈥檝e missed a trick).
It is imperative to your success that you keep all the viewers in one place and resist the trend of sending them
to the likes of the 鈥湷扇丝焓 Sewing Channel鈥 where they will be crocheted to an early viewing grave.
Herd the lonely sheep back to the safe fold of good old Channel three. Amass them there and wait for 鈥淥ne screen world鈥 where you shall have the UK鈥檚 premier portal for internet and video content with interactive adverts where I can simply click my pointer on the Dell laptop that the lovely lady is demonstrating in her fictional happy family home and add it to my shopping basket for delivery tomorrow. You鈥檒l have a set schedule of programmes as you do now for those who don鈥檛 like to think or make decisions, and you鈥檒l make me my own schedule manager with shuffle of course because I still do like a surprise.
Your broadcasting opponents will be in pieces, literally. One screen, one channel, one solution, ITV One.
Funny how Orwells year isn鈥檛 scary at all now ; )