After a golden year which climaxed last October in its most lucrative month to date, ITV is now plumbing a low point in its fortunes. Revenue is expected to fall 15 per cent compared with the same month last year, a prospect sufficient to send the main ITV company’s share price into a tail-spin once news of the likely shortfall leaked into the City.
To an extent Granada chief executive Charles Allen is justified in feeling aggrieved at the extreme reaction. Analysts should not have been so surprised at Granada’s profit warning. A reversal of fortune had been predictable for some time. On the one hand, ITV’s strong revenue performance in 1999 was propelled by a number of unique events, such as Euro 2000 in the spring and the Rugby World Cup in the autumn. On the other, ITV’s coffers had been artificially swelled by a surfeit of dot-com advertising. By spring this year dot-com mania had become a certifiable disease. There is no sign, so far, of the patient recovering.
All the same, a reckoning has been on the cards for some time. ITV has been nothing less than a PR disaster this year and Allen, as its principal power broker, must take his fair share of the blame for any fall-out that has resulted. The only fit descriptor for the handling of the succession crisis at ITV post-Richard Eyre is ‘lamentable’. The position of chief executive is now widely viewed as a poisoned chalice, notorious for the number of eminent industry figures who have allegedly refused it. Indeed, there are some who say the position is redundant as a result of continuing media owner consolidation. They may have a point. Scrapping the post would at least bring to an end the shilly-shallying which has coloured perceptions since the beginning of the year.
Unfortunately, this is not the only issue on which ITV has appeared weak and indecisive. The last minute compromise it has struck with the Independent Television Commission over News at Ten (or whatever it is to be called) stops just short of farce. All right, it’s a smack in the eye for Greg Dyke, who thought to steal some glory by shifting the nine o’clock news slot to ten. But ask yourself this: who’s going to be the bigger loser in the resulting ratings war now that Dyke has definitely decided to press ahead with his plan? A 20 minute bulletin four times a week isn’t exactly a prescription for heavyweight competition.
The silver lining in all of this is the 2.5 minutes of extra peak-time minutage ITV has wrested from the ITC in return for its humiliating U-turn on news. It’s a double whammy. It will placate advertisers by providing more of what they badly want,while silencing obstreperous complaints about media inflation. And it will hit ITV’s rivals C4 and C5 where it hurts. Theoretically, the extra minutage should be of equal advantage to all terrestrial channels. In fact, superior market power will ensure ITV benefits immeasurably at the expense of its rivals.