An uncertain future for ITV

Events, Karl Marx once remarked, have a habit of repeating themselves: the first time they appear as tragedy, the second time as farce.

How applicable to ITV, whose current situation has uncomfortable parallels with events ten years ago. Then, too, economic downturn and the distant reverberation of warfare beset us. Then, too, ITV was struggling to create a new identity amid unprecedented structural change and the mother of all revenue collapses.

The struggle was ultimately successful. It preceded nearly a decade of stability, under the auspices of the 1990 Broadcast Act, and ushered in a period of record profits for the major ITV companies. Now, by contrast, we can be much less certain of such a happy ending.

In those days, ITV could manage a 44 per cent share of peak-time viewing, and 29 ITV programmes had audiences of over 10 million; while multichannel television wasn’t much more than a twinkle in Rupert Murdoch’s eye. What we have today is a mainstream commercial TV channel which can barely muster 38 per cent at peak time (and the figure is still going southwards); whose would-be blockbusting ratings programme, The Premiership, has just been relegated to the scheduler’s twilight zone; whose future structure is chronically unpredictable, thanks largely to Government procrastination over the exact form of the Communications Bill; and whose attempt to create the multichannel revolution in its own image, ITV Digital, apparently lies in ruins.

Highly expensive ruins at that. ITV is caught between a rock and a hard place, between plunging advertising revenues and mounting ITV Digital overheads. As it happens, the digital terrestrial TV station jointly owned by Granada and Carlton has done better than expected in acquiring new subscribers recently. But that won’t save it from dismemberment, by all accounts. Despite a vigorous rearguard action by Carlton’s chief executive Gerry Murphy, the City has all but written ITV Digital’s epitaph. And, indeed, in one scenario envisaged by Granada’s own adviser Lazards, it would appear the terrestrial TV station’s subscriber base could be sold off to its arch-rivals, BSkyB and NTL/Telewest.

Here again there is an echo of the past. ITV Digital’s trauma is reminiscent of the demise of British Satellite Broadcasting after it had, in Ted Turner’s colourful phrase, “haemorrhaged red ink”. Its fate was to be bundled unceremoniously into Murdoch’s Sky operation.

One of the differences between then and now, however, was that Murdoch’s empire creaked at the seams from the weight of debt it was carrying. Ten years on, it is clear that Murdoch has become the one to watch in commercial television. He has effectively won the digital TV battle, with nearly six million subscribers to BSkyB. Moreover, his organisation seems in much better financial shape than those of his principal terrestrial or cable rivals. While undoubtedly smarting from the advertising downturn, he is nowhere near meltdown this time round. He even speaks optimistically of “rays of sunshine” – hopefully with more justification than ex-chancellor Norman Lamont when he mouthed the immortal words “green shoots of recovery”.

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