ITN: where good news is old news

Mining a 50-year archive will help a famous name through troubled times, boss Mark Wood tells Tim Webb

In the lobby of ITN's Gray's Inn Road headquarters in London is an 8ft by 20ft tank in which predatory fish chase their smaller fellow occupants. It's not dissimilar to the television news market in the UK: there are the whoppers (the BBC), then Sky News and ITN scrapping it out for the leftovers. At the moment Sky is winning that battle.

In the lobby of ITN's Gray's Inn Road headquarters in London is an 8ft by 20ft tank in which predatory fish chase their smaller fellow occupants. It's not dissimilar to the television news market in the UK: there are the whoppers (the BBC), then Sky News and ITN scrapping it out for the leftovers. At the moment Sky is winning that battle.

Aggressive bidding by Sky News pushed the price down for the current contract to provide news for ITV from £45m to £36m. ITN still won, but it was forced to cut almost 100 jobs. Sky dealt a far more serious blow earlier this year after it won the contract from ITN to provide news for Channel 5 from January.

These are troubled times for ITN as it prepares to celebrate its 50th anniversary next year. Accounts just filed show a loss of £2.5m for 2003 (down to a £5m write-off on its stake in struggling broadcaster Euronews). It faces cut-throat competition from Sky News for its remaining news contracts, which include Channel 4. Then there's the possibility that it could be entirely gobbled up by its largest shareholder ITV (who also happens to be its largest customer).

So what does the chief executive of ITN, Mark Wood, make of it all? He insists it's not all bad news. And he has a secret weapon - ITN's 650,000 hours of archived footage, which he thinks can turn the company into the "fastest growing media business in the UK". He has plans to make ITN the global leader in archive footage, which means $3.5bn-rated Getty Images might have to watch out.

You can't blame him for thinking laterally. Flogging archive footage is probably easier than the highly competitive broadcast news market. The long-running "News at When" saga did not help, when the main ITV evening news bulletin was moved around from its old 10pm slot. Now Sir Trevor McDonald hosts the main ITV news at 10.30pm, but audiences range between 3 and 4 million, compared to 5 million when it was shown at 10pm, the slot now occupied by the BBC. "These things take a while to settle down," Wood says. "It's for them [ITV] to decide when they want to schedule it."

Wood also downplays the loss of the Channel 5 contract. "It's a PR setback because it gets written about so much. It is the smallest contract by far." Sky won the contract by offering its Sky News reporters and international bureaux for the Channel 5 service. This was not an option for ITN, Wood says, because it already provides news to competing terrestrial channels, unlike Sky. "Trevor McDonald is a symbol of ITV and ITN. You can't see him being used for another purpose." There is even the hint of a little dig at Sky from the mild-mannered Wood. "Sky can do it if they have no seasoned journalists who are household names, like maybe ours are," he adds.

So if he's not worried about Sky, what is he worried about? "My biggest job is worrying about whether C4 and ITV are happy with us. I talk to them regularly about how we are doing. They are very happy." OK, what about the prospect of losing the largest contract, for ITV? "It's not something I want to think about. It's hard to say whether the business would be durable without it."

The relationship with ITV is key. Charles Allen, the chief executive of ITV, recently described the company as the "mothership" of ITN. "ITV is at the heart of what ITN does," Wood says. "Mothership is not a bad word."

ITN was founded in 1955 by the original ITV companies. But in 1990, the regulator ruled that they had to dilute their stake. As a result, along with ITV holding 40 per cent, Reuters, Daily Mail and General Trust, and Lord Hollick's United Business Media each own 20 per cent of ITN. But when the Communications Act came into force last year, the restrictions on ITV owning 100 per cent of ITN were lifted. DMGT and UBM are willing sellers - at the right price. "ITV owning 100 per cent is possible," Wood says. "These issues will be resolved in due course or not. But it's an issue for the shareholders."

ITV is also the source of many of ITN's problems. ITV is the largest customer and shareholder, yet must share ITN's services with its direct competitors, Channel 4, and until January, Channel 5. "It has been difficult in the past. Sometimes ITN has played piggy in the middle. Sometimes ITV would leap out and say something which wasn't appropriate. But the model works rather well."

The future for ITN is bright, Wood insists. Industry sources estimate that the company generates almost £10m a year - around 10 per cent of turnover - from selling archive footage to television companies, advertisers and other broadcasters. Some of it belongs to ITN, some of it is Reuters, Channel 4 and British Pathé footage which ITN has a contract to sell. Within five years, archive sales could represent half of ITN's total turnover.

ITN is also in talks with retailers about selling ITN-branded DVDs which could be in the shops next year. Wood will not give details, but says that "we have the potential to be global market leader. We have a long way to go but we are doing all right." They certainly won't want their golden jubilee party spoilt.