ITV feels the heat
CEO expected to ankle amid b'caster woes
Sizzling July -- the hottest in the U.K. since record-keeping began -- offered cold comfort for the broadcaster's flagship web, ITV1, where ratings July 5 were down almost 17% from the year before. It was the channel's worst perf in 51 years.
The poor showing of ITV's share price on the London stock market reflects ITV1's disastrous summer -- its second in a row -- and a soft advertising market.
Not even new gameshow "Pokerface," fronted by key entertainment act Ant & Dec, could up the ante.
Forecasts predict ITV1's revenue could fall by as much as 15% this year, costing the network some $383 million.
"The U.K. is one of the world's biggest economies and it ought to be able to support a big commercial TV station, but ITV1's performance goes from bad to worse," says a media analyst. "With so many channels out there fighting for ratings, no one expects ITV1 to grow its audience share, but the decline can be moderated."
CEO Charles Allen is expected to finally announce his decision to quit at ITV's interim results presentation Aug. 9, after nearly 10 years at the top of first Granada and then ITV.
"Much of what Allen has done since ITV was formed has been good in terms of bringing the two businesses together, stripping out excess costs and successful negotiations with the regulator," says Paul Richards, a media analyst at Numis securities, referring to the 2004 merger of Carlton and Granada, the dominant companies in the ITV network. "The question mark has been over the performance of ITV1. The creative side has been lacking."
Allen's exit strategy has been widely leaked during the past fortnight. It's believed he will stand down soon after to his 50th birthday in January, when lucrative pension arrangements kick in. These include an $18.7 million golden goodbye.
Allen has been under pressure to resign since he helped to forge a single ITV from the separate, often competing combines of Granada and Carlton.
His achievements include the strong performance of ITV's digital upstart channels, which have boosted their overall share from 3.58 to 4.03.
But he has faced huge obstacles including the fragmentation of audiences at a time when advertisers are tightening media budgets.
Critics say he should have taken a leaf out of the BBC's book by investing in digital channels sooner and pumping up online offerings.
ITV's long-term aim of reaping half its revenue from non-ITV1 spot ads by 2010 is sound, but it may be too little, too late.
Now speculation is turning to the name of Allen's successor.
ITV chairman Peter Burt has almost certainly approached ex-NTL topper Stephen Carter, the founding chief executive of U.K. media regulator the Office of Communications.
The youthful and talented Carter, a one-time advertising man who ran J. Walter Thompson's London office, left Ofcom last month.
At Ofcom he greenlit several major concessions for ITV. These included a big cut in license payments and relaxing programming obligations on children's and religious shows.
He has made no secret that he wants to return to a company boardroom.
Carter's recent experience gave him deep insight into the challenges ITV faces on all fronts, particularly from new media.
Other names being mentioned are ex-Five CEO Dawn Airey, now a key lieutenant to BSkyB chief James Murdoch, and Channel 4 director of TV Kevin Lygo.
Unlike ITV1, Channel 4 is on a roll, and the ambitious Lygo may believe the time is right to switch stations.
"You might think that things cannot get much worse for ITV1," says a former senior executive at the station. "Indeed, the autumn schedule looks strong. 'Cracker' and 'Prime Suspect' will return, and there are new seasons of 'X Factor,' 'Ant and Dec's Takeaway' and 'I'm a Celebrity ... Get Me Out of Here!'
"But each time ITV1 goes into autumn, it's starting from a lower ratings base. And every time you go into a commissioning round, the budgets are smaller than before. "
It is not hard to see why ITV needs fresh blood.
