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It’s going to take more than buckets full of charisma to make the grade at ITV
Chris Blackhurst5 Mar 2009
There's no doubting Michael Grade has charisma. Many business people don't have it but Grade, born into an entertainment family, has it in droves. Over lunch, he holds court. He's charming, ebullient, funny, irascible in equal measure. Even when he appears to be grumpy, his eyes twinkle mischievously. He's a natural performer.
It's obvious, spending time with him, why ITV and its staff believed they'd secured a saviour when he defected from the BBC two years ago and why the latter felt such a grievous loss. The contrast between Grade, the popular showman and Charles Allen, his number-crunching ITV predecessor, could not have been greater.
Today, though, while Grade still manages a smile, albeit one much weaker than before, it is Allen who is entitled to emit a large laugh. For all the hullabaloo, Grade has not worked his magic. It's now obvious that ITV's problems run deep and are more to do with the structure of the television industry than the company's ability under Allen to produce genuine hits rather than flops such as the appalling Celebrity Love Island.
Allen wasn't a creative man. That wasn't his forte. It was Grade's, though, and he duly spoke of a "content-led recovery plan" for the company. In the intervening period, Grade has stayed true to his word. ITV's programming has improved. "More people are turning back to ITV," said John Cresswell, ITV's chief operating officer, yesterday. Shows like X Factor, Britain's Got Talent, and Dancing on Ice were pulling in the audiences. Clever scheduling had seen Sunday night revitalised. On the creative front, Whitechapel and Above Suspicion were hits. ABC1s, so vital for advertisers, were switching to ITV.
Cresswell was right to say this and all credit to him, Grade and the rest of the team - there's no denying, ITV's output is better than it was. But as yesterday's dismal results illustrate, the accompanying resurgence has not happened. Grade is now having to slash jobs and budgets, something that was never in the original script.
In Allen's day, ITV shares were over 100p. Today, they're hovering above 23p.
So, while viewers may like what ITV is doing, the City is seeing a different picture. Grade and Cresswell argue that a combination of factors has dealt the station a heavy blow. "We're in the middle of a perfect storm," said Cresswell. "Three or four things are buffeting us at once. Operationally, we are doing well, for the first time since C4 was launched we've increased our advertising share."
Those difficulties, he said, were a severe advertising downturn - the proportion going to ITV may have gone up but spending is down - increased competition and a constraining regulatory environment. In the BBC, itv faces a competitor that has no need to worry about advertisers and their needs and has no obligation to make a return for its shareholders. That is a formidable foe for any company.
In Sky, it's up against an aggressive newcomer which relies on subscription for part of its revenue and does not have to pay heed to tradition and a requirement to provide some public service programmes. Sky is free to do as it pleases, while ITV must still keep one foot in the past.
It's this, coupled with the so-called CRR (Contract Rights Renewal - introduced by the regulator after Granada's merger with Carlton to protect advertisers from the new giant commercial broadcaster from charging them too much) say Grade and his colleagues that hold them back. Remove the public service obligation and CRR, they argue, and ITV can take a great leap forward.
They are right, but only partly so. Even without those handicaps, ITV will be fighting competition, the like of which it has never encountered before. One solution would be to combine with C4 and Channel Five. That at least would give the broadcaster scale. As it is, ITV is struggling and appearing increasingly ill-equipped for the all-singing, all-dancing digital and internet age. Grade is good but he is not that good - something else has to change.
