ITV’s fate hangs in balance

U.K. commercial giant teetering under Giant CEO

LONDON — When seasoned U.K. webhead Michael Grade arrived as topper at commercial giant ITV in January the sense of relief within the broadcaster was so strong you could almost touch it.

Ten months later, the gloss is beginning to fade from the Grade regime following a testing few months.

Not even an advertising bonanza worth an estimated $22 million generated after the England team got through to the rugby World Cup final on Oct. 20 has offset the gloom; ITV held exclusive live TV rights.

In September when Grade disclosed his growth strategy for ITV, most pundits were unimpressed.

They saw no real difference between his plan — based on boosting production revenues to make the broadcaster ship-shape for the digital age — and the one that led to the downfall of his predecessor, Charles Allen.

But things got worse.

Oct. 19 was Black Friday for Grade when he was attacked in the Brit media for his handling of the findings of an internal review by auditor Deloitte, published the day before, of ITV’s premium phone line services.

This revealed that ITV auds had been swindled out of more than $15 million in bogus phone-in votes made in shows like entertainment flagship “Saturday Night Takeaway” hosted by Ant and Dec.

While admitting that ITV’s behavior was “horrible” — the phone fraud occurred before Grade took over at ITV — he ruled out taking “token scalps,” claiming the swindles stemmed from a cultural failure.

Commentators were furious. Three months earlier Grade had called for zero tolerance toward anyone found guilty of deceiving viewers.

To reinforce the message that he intended to run a whiter-than-white ITV, the executive chairman slapped a commissioning ban on leading U.K. indie RDF, when it emerged the shingle had faked footage in a BBC documentary about Queen Elizabeth II to drum up international sales.

“If Michael Grade is serious about rebuilding ITV, he should lead by example and start dealing fairly and even-handedly with both inhouse producers and external suppliers,” says Alex Graham, head of shingle Wall to Wall and chair of indie film and TV lobby group Pact.

The jury is still out on the long-term damage ITV is likely to suffer from the phone voting scandal.

“If ITV was a consumer-facing business it would be little short of disaster,” says ex-ITV topper Steve Hewlett. “It is damaging but the price they are paying is in the broad court of public opinion.”

The City, London’s equivalent of Wall Street, is more upbeat even though ITV’s stock price is falling due to uncertain prospects for U.K. advertising growth.

“Sure, there has been a short-term hit regarding ITV’s reputation but it is nothing that undermines the long-term trust and value of the brand,” says Numis Securities’ media analyst Paul Richards.

Certainly ITV’s business looks healthier than it did a year ago. The rate of revenue decline at flagship web ITV1 is around half what it was and creatively the web appears more willing to take risks.

But doubts remain. A few days after the publication of Deloitte’s dismal findings, it emerged that ITV1 is reviving weekday nightly newscast, “News at Ten,” one of the iconic ITV brands of the past 50 years, but axed in 1999.

The move is an attempt to remind auds and advertisers of ITV’s glory days when the network was a cash cow by virtue of its airtime monopoly.

In the multi-platform digital age, when 24-hour news webs are commonplace and online news sources ubiquitous, resurrecting “News at Ten” could turn out to be a gamble too far, disrupting schedules that have seen ITV1 regularly run drama from 9-10:30 p.m.

Richards, however, is upbeat. “Michael Grade has a wonderful popular touch and is doing a good job of balancing the best of the old with some new ideas,” he says.