The ITV chairman Michael Grade might see his network's future increasingly in entertainment broadcasting, but there was nothing in the company's financial results to amuse shareholders yesterday. Mr Grade announced a slide in profits, massive asset write-offs and a suspension of dividend payments. The 600 job cuts announced will trim costs, but the contraction inspires little confidence that ITV's best days still lie ahead.

In one sense, the fact that ITV is struggling hardly comes as a surprise. The days when its broadcasting rights were considered a "licence to print money" are now a distant memory, and its business model has come under tremendous external pressures in recent years. Revenues have been hammered by the migration of advertising to the internet, and total advertising volumes are now being brutally squeezed by the recession. ITV also has the relentless competition of the recession-proof BBC – with its guaranteed £3bn a year of licence-fee money – to cope with. It is hardly surprising that ITV wants to shed some of its public service broadcasting commitments when it is up against a well-funded leviathan like Auntie in so many areas.

Yet the broadcaster's present and previous management teams cannot escape all responsibility for the plight in which ITV finds itself. Its difficulties cannot be solely ascribed to the "short-term horrors" of the downturn, as Mr Grade put it yesterday. The acquisition of the Friends Reunited website for £120m three years ago was misguided; ITV is now trying to sell the site and will probably register a fat loss.

ITV also paid too much for its sports broadcasting rights and has been investing too little in high-quality drama and documentaries in recent years. This last error should give its investors most cause for concern. When the analogue signal is finally switched off in 2012 and the digital era proper begins, there will be a new equality among free-to-air, private sector broadcasters. In a multi-channel age, none will enjoy special privileges; all that will distinguish them will be the quality of their output. The successful channels will be innovative and creative. ITV has still not fully switched on to that reality.