The ITV Zombie 05 March 2009

This week, the UK’s leading advertising-funded broadcaster ITV announced a loss of £2.7bn for 2008, and is cutting 600 jobs across its businesses, and plans to make other “significant” savings. After some disastrous business moves, ITV Digital and spending £120 million on the Friends Reunited, (now valued at about £40m), ITV is facing the awful truth of having to turn off the life support.

You have to wonder, what does ITV actually offer any more?

ITV still draws in big audiences for flagship shows like Coronation Street, (which regularly trounces EastEnders in viewing figures), Emmerdale and Dancing on Ice. But the former high quality dramas are long since gone, advertising revenues are drying up rapidly and there is very little money in the kitty to risk on the “next big thing”. In the multi-channel world of today the relevance of ITV is getting smaller and smaller.

ITV used to have strong regional identities, excelling in local news and creative programming from all over the country. Now the ITV News behemoth is a rudderless shadow of its former self, outpaced in resources and immediacy by the BBC local news, Sky News, and Channel 4 News.

As for its standing as an entertainment channel, ITV fell back on the lazy option of producing cheap “reality” television, talent shows and soaps. DVD sales suggest that the audience wants The Sopranos, and Dexter… not Celebrity Fit Club or Love Island.

I hasten to add that although I work for Sky, I obviously have no idea what the management’s plans are for the channel, this is just me surmising. But in my view, Sky is positioning Sky One as the general family friendly entertainment channel- with populist shows like Don’t Forget the Lyrics, Gladiators and Noel’s HQ. It also makes hard-hitting documentary series like Ross Kemp in Afghanistan.

Channel 4 is charged with providing a broad range of diverse programming, (traditionally), the risk taker- the gap filler where no other broadcaster goes. The combination of the high quality Channel 4 News, (supplied by ITN), US imports, the endlessly controversial investigative documentary series, Dispatches and its long history of inventive comedy.

Now if the BBC is sensible, it will reposition itself as the more highbrow, quality programming that it is uniquely placed to make. It alone has the money, and the editorial space to make something like Newsnight. The BBC is, (if you are willing to go with me on this), the HBO we all pay for.

Remove The Head or Destroy The Brain

So what’s the solution? Well, it’s unlikely another company is going to be riding in on a golden horse to save the day- Sky holds an 18% stake in ITV and even that is being challenged as breaking the competition laws. Also ITV has a huge pension hole, described by Channel 4’s chairman Luke Johnson as an “enormous poison pill”, coupled with the huge cost base of the ITV structure and low share price, its hardly an attractive business.

There has been a proposal of a potential merger of ITV, Channel 4, and Five… A truly ghastly idea, not content with screwing up its own channel it want to take another two down with it. In my view ITV needs to die, in doing so it would strengthen Channel 4 and Five- sorting out their financial problems in the process.