David Prosser: ITV needs to prove it has talent too

Outlook: No matter how benign the economic and regulatory environments, ITV has to have product to sell against

Saturday 30 May 2009 01:49 BST
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Will she or won't she? Susan Boyle, that is. Will she turn up to tonight's final of Britain's Got Talent? Who knows – though let's hope not for the sake of the infinitely more talented saxophonist also in the final – but either way, ITV hasn't had too many weeks like this one for a long time.

Media buyers reckon the combination of nightly helpings of the talent fest and football – ITV screened the Champions League showdown on Wednesday and has the FA Cup Final this afternoon – will have netted the broadcaster £30m or more in sales over the past seven days, an invigorating shot in the arm given the woeful state of the advertising market this year.

Happily, that on-screen outperformance has been mirrored by some good times out of camera shot. Two broker upgrades sent ITV's shares climbing even before yesterday's announcement from the Office of Fair Trading that it believes the terms of the contract rights renewal (CRR) rules should be eased in favour of the broadcaster, a decision for which ITV has been campaigning for the past three years.

Michael Grade, heading towards the exit doors at ITV, hasn't yet got everything he hoped for but the OFT is offering a pretty decent carrot. It will almost certainly be the rollover rights that disappear from next year, if the Competition Commission follows the OFT's advice when it reviews CRR at the end of 2009.

Since this is the rule that allows advertisers to insist on keeping the same preferential terms and rates when spending with ITV, even if they're also cutting their spending because ITV's audience share has slipped, it's a pretty major concession. It basically means ITV can go back to negotiating prices for ad slots on the basis of market rates, without a regulator breathing down its neck.

It's difficult to fault the OFT's view. CRR was constructed in a different world to the one in which broadcasters operates today, to protect advertisers following the merger of Carlton and Granada in 2003. The rapid growth of digital channels since then – which no one foresaw – means ITV simply does not have the dominant position it once enjoyed and its advertisers do not need so much protection.

For ITV, the best case is that CRR is finally resolved to its satisfaction in time for end-of-year negotiations with advertisers about 2010. If so, the fruits of Grade's campaign will ripen for his successor, who may by then also be enjoying the benefits of economic recovery.

As ever with this broadcaster, however, a worry persists. No matter how benign the economic and regulatory environments, ITV has to have product to sell against. The past week has been stellar for viewing figures, but next week's schedule hardly inspires confidence that the long-term decline of ITV audiences can be arrested. Feast to famine is the phrase that comes to mind. There had better be some more promising content on the way.

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