Media Analysis: ITV goes for broke

turn around an audience loss of 9% in the first half of 2005. Few in the
industry rate its chances.

No one could accuse ITV of not trying, however. Last week it unveiled an
autumn schedule bursting with big-budget new dramas starring bankable
names including Ray Winstone, Robert Lindsay, Caroline Quentin, Robert
Carlyle and Ricky Tomlinson. Add in returns for David Jason's A Touch of
Frost, Martin Clunes' Doc Martin, plus Foyle's War and Taggart, the
terrestrial premiere of Harry Potter and the Chamber of Secrets and
popular reality shows I'm a Celebrity, Get Me Out of Here and The
X-Factor, and you might expect the broadcaster to be boasting of a
ratings bonanza by the time negotiations start for next year's
advertising contracts.

Yet, even ITV doubts this will happen. The consensus among media
agencies, and ITV's own forecast, is that ITV1's 'all-adults' audience
will end the year about 7% down, putting £116m of business at
risk. There are two reasons for this: the channel's dire first-quarter
programming slate and the exodus of viewers, seemingly accelerating in
ITV1's case, from terrestrial to multichannel.

At last week's presentation to advertisers, director of programme
strategy David Bergg was at great pains to highlight this audience
shift. He pointed out that multichannel was now in 70% of UK homes, up
from 53% two years ago, with their choice having grown from 181 to 241
channels in the same period.

Populist pains

Populist programmes attracting huge audiences were becoming a thing of
the past, he added. This was evidenced by the steep decline in ratings
this year of what were once considered the channel's 'banker'
programmes, with long-running police drama The Bill down 9% and
Coronation Street down 8%.

It seems ITV has finally accepted the inevitable - that its future is
about managing ITV1's decline, while steadily building its presence in
multichannel.

'It was the first schedule launch where they have admitted to ITV1's
destiny and emphasised ITV as a family of channels,' says Phil Hall, TV
group manager at MediaCom.

He thinks the schedule is one of the strongest he has seen. 'It is right
to focus on high-profile dramas, and it has done well to get Ricky
Tomlinson in Mike Bassett - it should schedule it right after the
Champions League.'

Ian Anders, head of broadcast at Mediaedge:cia, feels it is the right
schedule at the right time. 'Post-merger, ITV has stripped out costs and
lost its creative energy, with a consequent decline in the quality of
its schedules.

'In the autumn, it's not taking any risks - it's not messing about with
new celebrity formats. It's difficult to judge the strength of the
dramas after seeing only short clips, but the strategy, employing ITV's
most bankable talent, makes sense,' he adds.

The schedule will be supported by a marketing campaign and new channel
idents, and Anders believes this will be critical to the schedule's
success.

'The new dramas should attract light TV viewers, but ITV will have to
spend some money to reach them with press and outdoor activity,' he
says.

Multichannel focus

Even so, the schedule is not going to prevent ITV from losing a
significant amount of revenue next year, predicts Matt Blackborn,
executive buying director at Starcom Mediavest. Clients, he says, are
looking for better value elsewhere.

The rate at which ITV1 has been losing commercial impacts has been
pushing up its price premium against the rest of the market, due to the
lag between its audience declining and its reflection in falling
demand.

'Even if ITV1 pulls back a couple of percentage points in audience share
this autumn, I don't think advertisers have any inclination to leave
money with it on the off-chance that it will get better,' says
Blackborn. 'ITV is in for a battering in this winter's
negotiations.'

Last winter, ITV cut a potential £100m loss of revenue on ITV1 in
half by persuading many advertisers to shift into ITV2. Accordingly, ITV
director of programmes Nigel Pickard was keen to promote ITV's digital
channels at last week's presentation, announcing increased programming
budgets and a November launch date for ITV4.

However, Blackborn does not believe ITV will be as successful in
converting ITV1's revenue losses into digital channels this year. One
reason, he says, is that its multichannel offering is not growing as
fast. Another is that, two years into CRR, media buyers are becoming
more adept at understanding how the system works.

Pickard was also promoting a raft of programmes in celebration of ITV's
50th birthday this September, including ITV's 50 Greatest Programmes and
ITV's Best Ever Ads. In its half-centenary year, one might suspect that
the strength of the autumn schedule is not just about protecting its
revenues, but protecting ITV's self-proclaimed reputation as 'the
people's channel.'

DATA FILE ITV1 - AUTUMN HIGHLIGHTS

MIKE BASSETT: Ricky Tomlinson reprises his movie role as the luckless
former England football manager, who is now managing Wirral County.
Amanda Redman plays his long-suffering wife.

COLD BLOOD: Matthew Kelly stars as a serial killer who has spent 15
years in prison playing cat-and-mouse with detectives who are trying to
find the location of his last victim's body.

WALK AWAY: Tamzin Outhwaite stars as the lover of a married man, played
by Mark Strong, who discovers that she only has months to live. Julie
Graham plays the cheated wife.

VINCENT: Ray Winstone plays crusading, workaholic private detective
Vincent, partnered by Coronation Street's Suranne Jones. Also stars Joe
Absolom and Eva Pope.