Eyre ‘risks’ huge challenge at ITV

ITV has large-scale problems, and new chief executive Richard Eyre will be worth every penny of his salary if he can solve them.

Richard Eyre, currently chief executive of Capital Radio and soon to be ITV’s first chief executive in two years, will need to bring all his famous charm to bear on the nation’s third channel.

He will have to unite the seven divergent media groups which own ITV; boost the channel’s fading reputation with media buyers and advertisers; increase viewing figures; tackle spiralling inflation; and merge the management of the Network Centre with that of the ITV Association. All this against a background of increasing competition.

It will also fall to him to appoint a director of programmes, to decide whether he wants a commercial director and whether he wants to continue ITV’s 12-month search for a marketing director. The word gargantuan springs to mind, and if Eyre rises to the challenge, his salary of 500,000 will be money well spent.

The seven ITV media groups – Carlton, United News & Media, Granada, Border Television, the Scottish Media Group, Channel and Ulster Television make uncomfortable bedfellows, particularly when it comes to programming.

Especially fraught is the relationship between Carlton, which covers London during the week, and Granada which as owner of London Weekend Television covers the capital on Saturday and Sunday.

Mediapolis chief executive Bob Offen says: “It’s all about getting them to act as one company without them being one company.” Eyre does have experience of bringing people to the table – he played a major role in establishing the Radio Advertising Bureau.

But ITV chairman Leslie Hill denies the in-fighting. “It is remarkable how well the companies all work together. Business is conducted in a very gentlemanly fashion.”

The merger of the ITV Association – the body which handles agency deals, structural issues and public affairs at the network – with the Network Centre, which currently controls programming, is a pressing issue for Eyre. It is believed the merged operation will be known as ITV Ltd.

Again Hill plays down the significance of any merger: “It is not about whether or not we become a public company, it’s about streamlining operations so we compete with channels operating on a national basis.” He denies the ITV Ltd name.

ITV’s bad press will be harder still to resolve. Part of the station’s attempted solution to the problem was the bringing on board of M&C Saatchi as its creative agency last year. But the “Britain’s most popular button” has not proved to be the country’s favourite campaign.

Advertising has failed to lift ITV’s falling audience share, although M&C claims that its primary role was brand building rather than to reverse falling viewing figures.

In January to May this year, ITV had only 59 per cent of all commercial viewing, according to figures from Barb, a fall from 63.8 per cent in 1996. In 1990, before cable and satellite came into their own and way before the launch of Channel 5, the station had 83 per cent of total commercial viewing. The Media Business Centre predicts that by 2004 the share will have fallen to 50 per cent.

Sky Sports has overtaken even the BBC as the UK’s preferred channel for sports (MW June 6). There are currently 2.7 million cabled homes and 6.2 million dishes growing annually at rates of 26 per cent and 16.1 per cent respectively.

The Media Business Group broadcast director Paul van Barthold sums up the fears expressed by many media agencies. “Everybody expected ITV to lose audience share. The issue is the pace – figures are just falling off too rapidly.”

One senior TV buyer puts a different spin on the station’s problem. He says: “ITV is the leader in its field but is in the perverse position that it does not have enough products, which is bad for any business.”

Its licence is for general entertainment, leaving other channels free to pick off choice segments of audience and targeting them more directly. Sky Sports is a prime example of this – it is stealing audience share of young males, the natural target of high-spending advert isers such as breweries and jeans manufacturers.

Inflation is, perversely, mostly the direct result of falling audience share. Apart from train networks, ITV would seem to be the only company where as service declines, prices go up.

However, if the IPA’s recommended increase in minutage proposed in its July 1997 Media Research document is implemented, then inflation could be eased. The proposals suggest an extra half minute per hour, taking the average minutage during peak hours to eight minutes and the off-peak average to seven and a half.

The consensus among the media industry is that if anyone can bring leadership to ITV, it is Eyre. Leo Burnett broadcast director David Connolly says: “Strategically he is very well regarded.” Another says: “He is exactly what the role needs – a statesman.”

Of course he has detractors- the main criticism levelled at him is for his off-the-wall decision to buy restaurant group My Kinda Town for 51m last year.

The chain is a strange fit with a radio station and has contributed to the station’s decline in value to 378m from 540m five years ago. He has also been attacked by the City for paying too high a price for Virgin Radio.

Eyre refuses to comment on his new role: “The danger is that I could sit in splendid isolation from ITV and make comments on what ought to be done without consulting the people there.”

But he explains why he accepted ITV’s offer: “I recently read a piece about people in their 70s who were asked how they would change their life if they could do it again. They all said they would have taken a risk.”

Torin Douglas, page 17

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