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.

News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
News
i100

Other places that have held independence referendums
Arts and Entertainment
Jack Huston is the new Ben-Hur
film

It scooped up an unprecedented 11 Academy Awards when it was first remade in 1959

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
News
news

Arts and Entertainment
Blossoming love: Colin Firth as Stanley and Emma Stone as Sophie, in 'Magic in the Moonlight'
film

Actors star in Woody Allen's 'Magic in the Moonlight'

News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
News
peopleThe Times of India said actress should treat it as a 'compliment'
Arts and Entertainment
Maxine Peake plays Hamlet at Manchester's Royal Exchange
theatreReview: Maxine Peake brings emotional ferocity to Shakespeare's starring part
News
news

Watch this commuter wage a one-man war against the Circle Line
Property
Home body: Badger stays safe indoors
lifeShould we feel guilty about keeping cats inside?
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

Travel
travel

...and the perfect time to visit them

Sport
Jonas Gutierrez (r) competes with Yaya Toure (l)
football

Newcastle winger reveals he has testicular cancer - and is losing his trademark long hair as a result

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Media

Head of Marketing - London

£60000 - £85000 per annum: Ashdown Group: Interim Head of Marketing / Marketin...

IT Application Support Engineer - Immediate Start

£28000 per annum: Ashdown Group: IT Software Application Support Analyst - Imm...

Digital Project Manager

£25 - 30k: Guru Careers: A Digital Project Manager is needed to join an exciti...

Paid Search Analyst / PPC Analyst

£24 - 28k + Benefits: Guru Careers: We are seeking a Paid Search Analyst / PPC...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week