Long hot summer for Charles Allen as he tries to end the drought of hits

ITV chief is under pressure after the flagship channel's audience share falls below 20% for the first time
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Charles Allen, the embattled chief executive of ITV, is facing a make-or-break month as he strives to turn the struggling broadcaster around.

For most of the City's bosses, August is a time to relax and go on holiday. But not for Mr Allen. When he presents the company's interim results on 9 August, all eyes will be on how advertising revenues have been affected by the shrinking audience share at ITV1 in the first six months of the year.

ITV will then unveil its autumn schedule. Media buyers are expecting another diet of reality television programmes, but are hoping that new dramas will prove a hit.

One new programme planned for ITV Play, the experimental audience participation channel on Freeview and Sky, is a dating show based on the concept of FriendsReunited. co.uk. The school reunion website was bought by ITV for £120m last year.

"We are not holding our breath," one media buyer said of the autumn schedule. "ITV will come out with another round of I'm a Celebrity and a few dramas. There's not much more it can do."

When Mr Allen took the helm of the newly merged ITV - created from Carlton and Granada at the beginning of 2004 - media gossips gave him a year before he was turfed out of the job. The expensive failure of ITV Digital, and Mr Allen's part in it, loomed large in the minds of many shareholders and analysts.

Two and a half years later, he is still chief executive, but speculation over his future started cranking up again last week. An ITV spokesman gave short shrift to what he described as the latest bout of speculation and refused to comment.

But a successful results presentation and a promising schedule could help ease the pressure on Mr Allen.

ITV's share price has slumped and is currently hovering around the 100p mark for the first time in two years. ITV has also underperformed the FTSE 100 and the media sector.

Fewer people are watching ITV, and the audience share of ITV1 has fallen below 20 per cent for the first time. This has deterred advertisers, and ITV1 bookings for September are estimated to be down by more than 10 per cent on the previous year. Although ITV has launched four new channels on the Freeview and Sky platforms, it still relies on ITV1 advertising revenue for more than two-thirds of its overall revenue.

Conditions are also tough for rival broadcasters, however. Audience figures for other terrestrial channels are falling as the number of homes with multi-channel television increases. The advertising market has also been flat this year, and the World Cup did not deliver the hoped-for recovery.

And Mr Allen has achieved a great deal, cutting costs and successfully lobbying the media regulator, Ofcom, to relax ITV's expensive public-service programming commitments.

However, ITV is still being criticised for not producing enough blockbuster hits. One media buyer said that she now sees ITV as a company, rather than a broadcaster. "That says it all, really," she said. "And at the moment, it's not a very good business at that."

Whether anyone else could do any better is debatable, and a lack of suitable candidates could provide Mr Allen with some breathing space; the search for his replacement is likely to be lengthy. Most private equity groups stalking ITV do not own other media assets in the UK, so would not save money by combining the businesses. ITV's financial outlook is also not clear, which would make a debt-funded acquisition risky.

Whatever happens, one thing is certain: the City has become fed up with Mr Allen.