Know future 

1 June 2002

It used to be simple. In the red corner, the BBC Television Service. In the blue corner, the nascent independent television, known as ITV for short.

There was always some transmitter overlap, but in the main viewers only had a choice between the BBC and their regional ITV contractor. The cosy duopoly was briefly skewed when the Pilkington Commission, dismissive of ITV’s cheap quiz shows and downmarket soaps (so what’s new nowadays, one might ask) and impressed by the BBC’s public service promises, awarded the latter a third channel, but the arrival of Channel 4 a decade and a half later restored the status quo.

The fledgling cable operators barely registered in the public consciousness and digital satellite broadcasting was years away. ITV could be assured of dominance in both popular audience share and advertising revenue, which in the more lucrative regions ensured healthy profits. The Canadian news magnate Roy Thomson’s famously indiscreet remark that owning a commercial TV franchise in Britain was “like having a license to print your own money” was no idle boast.

Fast forward to 2002. Multi-channel TV is thriving: British Sky Broadcasting (BSkyB) has five million subscribers; the cable operators NTL and Telewest, albeit drowning in restructured red ink, contribute to the audience total; and the subscribers left high and dry when ITV Digital folded can now look forward to a new service run by the BBC-Crown Castle consortium. For the one-off cost of a set-top box, anyone will be able to access dozens of free channels pumped into the ether.

Against this, under the new dispensation offered by several bouts of de-regulation (of which the 1990 Broadcasting Act is but the most notorious) ITV has coalesced into three major blocks, owned by Carlton, Granada, and Scottish Media Group (SMG).

There is a widespread view that the whole network will merge into a single corporate entity when the law permits, with SMG and the remaining small fry being swallowed up by Carlton and Granada before they themselves merge. Although the Channel 3 licenses are awarded by region, there is nothing to stop holders of multiple licenses from imposing a uniform presentation package across the regions they control, as Carlton, Granada and SMG all have done to one extent or another. With franchises that appear indistinguishable from one region to the next, the Network Promotions Unit producing trailers under the ITV1 banner for the entire UK and the scaling back of local programming, ITV’s regional character has been radically downgraded and, come its expected autumn re-launch, may well all but vanish. Even now, in many cases it functions as a homogenous channel in all but name.

ITV’s right to broadcast, guaranteed by statute, is a relic of an era when it was the only serious competitor to the BBC. Once the analogue transmitters are switched off, which remains the government’s stated intention, ITV will have to compete in an increasingly crowded market of channels, all scrambling for viewers and advertising revenue. Its assured place on the airwaves may well be no more.

It will have to maintain its presence on Sky Digital, secure new digital licenses, and establish a presence on other digital terrestrial infrastructures such as Crown Castle. A new super-regulator in the Office of Communications (OfCom) will take over responsibility for regulating all broadcast media, among other things. In an era of digital broadcasting ITV can expect no special favours from OfCom such as they received from the IBA, a previous regulator they had spent years lobbying against.

The question is, what can it do to survive in the brave new world of real competition? The best way to guarantee its long-term future is to back-pedal and become more responsive at local level to its viewers. One of the driving forces behind the previous decade of mergers and acquisitions was the downturn in advertising revenue. Newly merged franchises could ill-afford to run duplicate divisions, which helps to explain the disappearance of individual station identities. If an owner of multiple franchises could commission a presentation package from an outside company, or have one of its stations handle continuity for them all, then why pay for each station to have its own idiosyncratic presentation department? It could have its cake and eat it, while denying the viewers theirs.

So it is unrealistic to wish away shared presentation across the network. But ITV could still attract an increased audience share if it dealt with news, events and features that affected viewers locally. Or the Independent Television Commission (ITC), taking advantage of an increased number of frequencies available on digital, could license competing Channel 3 operators in the same area, allowing new blood to give the incumbents a run for their money. Failing that, ITV faces four options, none of them attractive. ITV could carry on as if nothing had happened until it is squeezed by Sky from one direction, a resurgent BBC from another and, crucially, the loss of its analogue transmission infrastructure.

It could seek permission to establish a rival service to compete with BBC/Crown Castle, although after the fiasco of ITV Digital this is hardly likely for some time. It could find an international giant, such as Vivendi Universal or Viacom to buy it out, thus giving it access to fresh content, albeit at the cost of losing its independence. Or it could ditch its transmission functions and become a pure production house and supplier of archive material, with the vast library of programming it has accumulated over the decades.

Whatever happens, ITV as we now know it will soon change beyond recognition. The regional structure has been displaced by consolidation as noted earlier. Famous names like Thames were thrown overboard in 1992. Others, such as Central, have disappeared as a result of takeovers and subsequent re-branding. The persistence of regional names such as Anglia and Meridian, already anachronistic, will become all but meaningless when (not if) the Channel 3 licensees merge. A single (maybe foreign) entity will own the channel across the United Kingdom, marketed under one brand. Even the name ITV might go. The channel will have to decide what its long-term strategy is. It might remain a mixed channel, attempting to combine the occasional worthy programme with ratings-pullers. Or it could focus purely on entertainment, competing with (say) Sky One. One thing is certain. The ITV that many of us grew up with and have such fond memories of, is no more.

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