Relations between ITV and the BBC have been disappointingly cordial in recent years, so it was good to hear Adam Crozier, ITV’s chief executive, blaming his licence-fee-funded rivals for his own network’s ratings slump.
“Last year, we lost out to the BBC, who have been outspending everyone,” Crozier said after ITV revealed that its viewing figures are down 5 per cent so far this year, with the lustre coming off long-established hits such as The X Factor and Downton Abbey.
“The BBC should spend more money in areas like the arts. They seem to be chasing ratings in entertainment and drama that commercial channels can do instead,” argued Crozier, who might not be best pleased to see the BBC’s Poldark reboot competitively scheduled against his own Mr Selfridge in the plum 9pm Sunday night slot.
Gripes over the BBC aside – and an over-reliance on the ageing X Factor – ITV’s full-year results suggested that the broadcaster is far from the basket case it was widely assumed to be when Crozier took the helm five years ago.
The rise of on-demand viewing among younger audiences promised to sweep away “legacy” broadcasters such as ITV that failed to make enough globally successful shows and were over-reliant on traditional advertising. In addition, ITV had saddled itself with a £650m debt,
Yet, last week, Crozier was able to announce a £250m special dividend on the back of a pre-tax profit of £712m for last year, up 24 per cent on the previous year. So what has happened?
ITV Studios is now the UK’s biggest production company and aggressively sells formats and shows to US channels. Moreover, ITV has made smart acquisitions and is in talks to buy Talpa, the Dutch production company behind The Voice.
And it finally “gets” digital. Its online, pay and interactive division recorded a 30 per cent revenue increase, growing to £153m last year. Meanwhile, ITVBe, the new lifestyle and reality television channel, is entertaining its target young female audience with a diet of Towie-tastic trash.
Despite the ratings slide, ITV’s advertising income grew 6 per cent last year, confirming that, despite fears that the communal viewing experience is dying, the channel remains the best vehicle for advertisers to reach a sofa-bound mass audience in Britain.
Crozier wants to arrest the audience slide, admitting “we did not get everything right ourselves”. He excluded the second series of Broadchurch, which did not live up to pre-transmission hype but was still seen by an audience of 9.2 million (including catch-up viewers).
Drama is a vital genre for both UK viewers and international sales. Cilla, starring Sheridan Smith giving an award-winning performance as Cilla Black, was one of the network’s highest-rated dramas of last year.
Commercial properties in the pipeline include a new Jekyll and Hyde adaptation starring Richard E Grant, a 13-part Beowulf, based on the Old English epic of monsters and heroes, which should appeal to Game of Thrones fans, and a new Thunderbirds Are Go! In addition, a hypnotism-based game show, titled You’re Back in the Room, presented by Phillip Schofield, could become the next Saturday night hit (although it will have to be careful to abide by strict broadcasting rules preventing exploitation of participants under hypnosis).
On the sport front, the World Cup delivered 14 million viewers to ITV for England v Uruguay last year; but, despite owning exclusive rights to the Rugby World Cup later this year, the broadcaster has lost the Champions League to BT, leaving a mid-week schedule hole. And it chose not to bid for Match of the Day, which the BBC paid £85m to retain.
“The Premier League is now beyond the means of any terrestrial broadcaster,” Crozier said. “The latest deal, which represents a 0.6 per cent share of viewing, will account for 25 per cent of programming costs. With Match of the Day, and the time it has to be broadcast, we could not make the numbers add up to get a decent return on it.”
So, while union members at ITV are threatening a strike ballot over the company’s 2 per cent pay offer for this year, shareholders were pleased with the broadcaster’s results, raising speculation about how long it might remain a British-owned company.
American billionaire John Malone’s cable group, Liberty Global, which bought Virgin Media two years ago for $24bn (then about£15bn), has acquired a 6.4 per cent stake in ITV. Stephen Williams, an analyst at broker Brewin Dolphin, said ITV could become a bid target. “The sector is undergoing consolidation as companies offer the ‘quad-play’ of fixed-line telecoms, mobile, television and broadband to consumers. ITV, as a free-to-air broadcaster, is clearly well placed to play a significant part in this and could well be a target for a number of participants, including Vodafone and Liberty Global.”
Matthew Hook, managing director at Carat, the leading media buying agency, added: “ITV can’t afford to stand still. They will need to rapidly top up their slate with new quality programming brands to swell share of audiences in the UK and licensing revenues abroad.
“But the latest results show that Adam Crozier has firmly placed his bets in the right place by aligning ITV’s future with the dynamics of globalisation and media convergence. There are two big revenue success stories here: the explosive profit growth driven by the ownership of high-quality content for licensing globally, and the very healthy groundswell in digital revenues.”
The prospect of ITV falling into US hands is a live one. Hook said: “By committing to globalisation and digitisation, ITV has chosen the right course in the content business and it will be interesting to see whether its success sparks the acceleration of more global conversations within broadcast, which has hitherto been a largely domestic industry.”
‘OfBeeb’ would need real teeth
Rona Fairhead’s proposal last week to abolish the BBC Trust, which she chairs, and hand over its responsibilities to an external regulator took many in the media world by surprise.
After less than six months in the post, Fairhead has come to the conclusion that the fault lines between the responsibilities of the Trust and the BBC’s executive boardare unsustainable. A new organisation should be created solely to hold the BBC to account, she suggests, alongside a “unitary” BBC executive board. This “OfBeeb” would protect editorial standards and hold the BBC’s commercial operations to account. But how different from the Trust would it really be? It would have to stand firm alongside the board on occasions, if the BBC’s independence came under attack from a hostile government.
Ultimately, the new regulator could be given the power to recommend the level of the licence fee. OfBeeb would need a strong leader. Perhaps Sir Howard Stringer, the former Sony CEO on the BBC executive board, could find himself on the headhunters’ list?
Wellcome’s spread of the life scientific
The Wellcome Trust launched Mosaic, a new digital forum for long-form science journalism, a year ago.
It’s heartening that articles exploring the science of life have been read by 10 million people since then under Mosaic’s Creative Commons licence, which allows in-depth pieces on health, medicine and research to be reproduced anywhere in the world so that articles reach as large an audience as possible.
One particularly powerful piece, “One virus, four lives: the reality of being HIV positive”, by Patrick Strudwick, won a Medical Journalists’ Association award.
Mosaic will celebrate its anniversary by launching a series of podcasts from the past year’s articles, including In Other Words, about interpreters who translate in real time, written and read by BBC radio’s Geoff Watts.
Mark Henderson, editorial director of Mosaic, said: “Mosaic’s innovative publishing model means that people from as far afield as India, Australia, Brazil and beyond, whether they have specialist scientific expertise or not, have been able to read about the most complex and compelling issues in health and biomedical research today, and all for free.”
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