The `valueless' company that grew into a pounds 200m global media player
Friday 19 November 1999
His comments are a reflection of the fact that ITN is fast becoming a global media company. Once News At Ten was its raison d'etre. Now its ITV service in Britain is only one part of a fast-growing international television, radio and Internet business. The changes have their origin in the 1990 Broadcasting Act, which liberated ITN from total ownership by a large number of rather old-fashioned ITV companies.
Now only Granada and Carlton have stakes, 20 per cent each, with the rest of the company being owned in equal part by Reuters, United News and Media and the Daily Mail company Associated.
The widening of the ownership instantly led to a change in strategy. ITN was no longer restricted to being nothing other than a news service provider, existing totally on supply contracts which, because of ever- increasing competition, were bound to deliver ever-smaller returns.
Although the company had contracts with ITV and Channel 4, it was expected to produce news more and more cheaply as companies such as Sky made competitive bids.
To break the mould the decision was made three years ago to take a one- third stake in London News Radio, allowing ITN to build up its role of media owner. Two months ago it converted that share into a stakeholder-supplier relation-ship by completing a deal to supply LNR news.
Last year ITN took a 49 per cent stake in the European news service Euronews, giving it operating control. The channel is now beating CNN for audiences in the "big five" European countries - the UK, France, Germany, Italy and Spain - and is, in some months, turning an operating profit.
Mr Purvis says he thinks the operation, overall, will be in profit by the end of next year. That distinguishes it from BBC World, the BBC's international service, which last year lost about pounds 15m.
Elsewhere, ITN is looking to enter "partnerships" in the 24-hour news business. The company has just signed a deal with Orange to enable mobile phone users to access not only news headlines, but tap into about two full Internet pages of news on each breaking story.
Within the next few months ITN is also expected to announce a "step change" in its provision of news to American audiences. It already supplies half- hour bulletins for the public service channel, PBS.
It would also like to launch a 24-hour television news channel, which will be announced "when the relevant deals are signed" - code for not just a replica of Sky News but something with a special alliance, or possibly an Internet element to back it up. A Reuters element is possible in the deal.
When, back in 1990, the company entered its new era, Andrew Quinn, the ITV chief at the time said that the shares in ITN were "valueless". He has been proved wrong. The Daily Mail bought a 20 per cent stake for pounds 20m, and the company has recently been valued at around pounds 200m. Profits have been healthy at around pounds 20m, declining to between pounds 9m and pounds 10m this year.
The changes, while impressive, also account for the turmoil on the newsroom floors, as reporters, producers and others are reluctant, in the face of practically frozen wages, to gear up for news that never stops, and the constant supplying of ever-integrated outlets - whether they be analogue television, digital television, radio or the Internet.
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