The battle of Britain's favourite TV channel

Angry advertisers and new rivals are threatening the cosy world of ITV. Mathew Horsman asks if there's a crisis in the making

The question is already being asked: is commercial television in Britain sliding toward crisis? The query might appear odd at a time when advertising revenues earned by the ITV companies are charging ahead and audience figures show that the Channel 3 service is still far and away Britain's favourite. But there are troubling signs, and ITV is beginning to heed them.

Notwithstanding an upturn in ratings last week, audience share has dropped sharply in recent months, as viewers turned increasingly to BBC1's improved prime-time offerings. So far this year ITV's share has dropped to 41.6 per cent, compared to 43.8 in the comparable period in 1994. Advertisers are complaining loudly about higher prices for air time, and want to see better programming and a larger viewership to justify their pounds 1.5bn- plus spending. "Shape up or we go elsewhere," was the message from the Association of British Advertisers last month.

Although ITV heads laugh publicly, there is private worry about the inroads pay-TV has been making in Britain, and about the prospects for a third commercial channel, Channel 5, from early 1997. With a radical transformation coming from digital TV, a cosy world is in for a shaking.

Hence a new battle plan; the results will be there for all to see in the autumn. Prime-time production budgets are to be increased by "several" million (nowhere near the pounds 40m rumoured in recent days). A dozen blockbuster films scheduled for broadcast later this year and in 1996 have been brought forward. ITV companies are also pressurising the Government to award digital channels to existing licence holders, allowing them to develop additional streams of programming.

Leslie Hill, the chairman of ITV, said: "We are not prepared to sit back and have someone take our market share." Hill concedes that the short-term moves are in direct response to lacklustre ratings. "Recently, there have been a few poor months. We had to react."

The quick response is largely the work of Marcus Plantin, head of ITV Network Centre. He put together the new strategy, and sold it to ITV chiefs at a meeting late last month.

Action was clearly needed. Rationalisation and cost-cutting in recent years have had negative effects on programming. That was fine for as long as the BBC floundered, producing weak dramas and humourless comedy. But the public broadcaster has lately recovered its form.

Putting on a brave face, Michael Green, chief executive of Carlton Communications, operators of the London weekday and Central licences, told media analysts privately that the BBC had made its recent strides by copying ITV. He vowed to fight back. "We will surprise you," he told his City audience.

Is Plantin's plan enough to stop the rot? Critics of ITV, unsurprisingly, say no. They point to a decline in quality and a lack of imagination in scheduling and commissioning. The ITV companies are complacent, they argue - too happy to reel in monopoly profits and not clever enough to prepare for increased competition from satellite, cable and digital TV. "These guys have been granted a licence to print money," said one pay-TV executive. "They don't like competition."

For their part, advertisers have their own agenda. Their association recently recommended extra air time for commercials and, once again, a new slot for News at Ten to free the evening for uninterrupted films - uninterrupted, that is, except by adverts. Advertising rates have increased well ahead of inflation in each of the past two years. Big spenders don't like that; declining audience figures merely intensify their anger.

They are impatient for the debut of Channel 5, if that is what it takes to temper future rises in advertising rates. Bidders for the Channel 5 licence expect to win a comfortable share of the national audience within two years, perhaps as much as 12 to 15 per cent. Generally lower ad rates should result.

In the longer term ITV's real threat may come from the non-terrestrial sector. Senior ITV executives, as well as Channel 4's Michael Grade, have added their voices to the throng complaining to the Government about BSkyB's stranglehold on the pay-TV market - particularly its control of major Hollywood output and sports coverage.

"The UK Government has been extremely dilatory in dealing with the monopoly BSkyB enjoys," Michael Green said at an industry conference last month.

BSkyB's response to ITV sniping is blunt. "They are worried about the introduction of digital television," says David Elstein, head of programming. BSkyB is preparing to go digital by early next year. And complaints, no matter how vociferous, cannot change the underlying trends. Cable and satellite combined may have a miniscule market share, but the numbers are growing, if slowly, with Sky's sports and movie channels leading the way along with the BBC-fed UK Gold. About 4.5 million homes in Britain now have either satellite or cable. That could reach 10 million within five years.

Just signing up for cable or satellite does not necessarily mean viewers will abandon the BBC and ITV. Indeed, households with the new alternatives still watch the traditional channels more often than Sky or other services. But internal studies by the BBC suggest that the audience share of the "traditional" broadcasters will drop from 85 per cent to about 60 per cent within five to 10 years.

Cable and satellite are already making small inroads into ITV's share of the advertising market. In 1993, all the ITV companies combined took 78 per cent of the pounds 1.9bn spent on commercial TV advertising, compared to 17 per cent for Channel 4 and 5 per cent for cable and satellite. By last year, ITV's share was down to 75 per cent, while Channel 4 took 19 per cent and satellite and cable 6 per cent.

There may be another threat on ITV's horizon: a fully commercial BBC. The public broadcaster has become involved in several commercial ventures, not least UK Gold. It is also looking at forging links to commercial on- line electronic service companies such as CompuServe.

Such moves have again raised questions about the Beeb's public-service charter. Stephen Dorrell, the National Heritage Secretary, told industry leaders last week that the advent of digital TV would so transform the television industry - fragmenting audiences and increasing viewer choice - that the licence fee might become indefensible. In a head-to-head battle for advertisers in a fully commercial market, the BBC - with the best brand name in the business - might well give ITV a fright.

ITV's brand, meanwhile, looks decidedly hazy, Network Centre notwithstanding. The franchise wars of 1991 transformed the unified ITV kingdom into a series of fast-buck fiefdoms: increasing loss of identity has been the result. Fragmentation, ratings chasing and being advertising-driven will make it easier for the product pushers to dictate terms. It could make ITV companies act more and more like cable companies - pursuing viewers downmarket with the wild abandon that typifies American television.

The serious challenges to ITV are, admittedly, some way off. In the interim, the commercial companies retain their privileged position. But they need to prepare for inevitable change. A few million more on programming and a shake-up of schedules might safeguard audience share for a time. In the long term, minor tinkering won't be nearly enough.

peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
Romelu Lukaku puts pen to paper
Robyn Lawley
Arts and Entertainment
Unhappy days: Resistance spy turned Nobel prize winner Samuel Beckett
Have you tried new the Independent Digital Edition apps?
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
Troy Baker and Ashley Johnson voice the show’s heroes
gamingOnce stilted and melodramatic, Hollywood is giving acting in video games a makeover
Life and Style
Phones will be able to monitor your health, from blood pressure to heart rate, and even book a doctor’s appointment for you
techCould our smartphones soon be diagnosing diseases via Health Kit and Google Fit?
Ryan taming: the Celtic Tiger carrier has been trying to improve its image
travelRyanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
Life and Style
Slim pickings: Spanx premium denim collection
fashionBillionaire founder of Spanx launches range of jeans that offers 'thigh-trimming construction'
Sabina Altynbekova has said she wants to be famous for playing volleyball, not her looks
Life and Style
tech'World's first man-made leaves' could use photosynthesis to help astronauts breathe
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Data Scientist

competitive: Progressive Recruitment: A data analytics are currently looking t...

Insight Analyst Vacancy - Leading Marketing Agency

competitive: Progressive Recruitment: A leading marketing agency have won a fe...

Account Manager, London

£18000 - £22000 per annum, Benefits: Excellent Uncapped Commission Structure: ...

Sales Executive, London

£18000 - £22000 per annum: Charter Selection: This exciting entertainment comp...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star