Grade ‘to double ITV income’

Michael Grade, executive chairman of ITV, on Wednesday outlined a five-year, self-funding strategy to increase revenue, improve programming and expand its online audience.

Mr Grade’s plan – envisaging a doubling of income from ITV Productions to £1.2bn by 2012 and a quintupling of internet revenue to £150m within three years – hinged on self-sufficiency. “We will pay for new investment in content through greater efficiencies throughout the business.”

Mr Grade added that £200m of production company acquisitions would be funded by selling “non-core assets” such as ITV’s stakes in Manchester United, Arsenal and Liverpool football clubs.

“Reshaped, revitalised and redeployed, ITV’s unrivalled assets will ensure that it is once again a top- and bottom-line growth business,” he said.

The plan sees regional news programmes, which ITV is contracted to make by its public-service broadcasting remit, cut from 17 to nine. That would save between £35m and £40m from 2009.

But Mr Grade conceded that would depend on approval from Ofcom, the broadcasting regulator. “Plan B is for ITV to spread itself thin in the regions.”

Bectu, the broadcasting trade union, said that, in either case, hundreds of jobs would be lost.

Investors had expected Mr Grade’s strategic update to focus on improving ITV1’s schedule but they had also presumed it would be paid for by extra investment.

Mr Grade outlined only £20m of extra spending on ITV2, its main digital channel. 

He promised to focus ITV1’s peaktime schedule on long-running series, providing efficiencies in equipment and wages, plus the prospect of earnings from international sales.

Mr Grade saw 75 per cent of all ITV1 programmes being made by the in-house production team against 54 per cent now.

He promised “in blood” that Simon Shaps, director of television, would choose programmes on merit, wherever they were made.

Restructuring of commercial relations with independent programme-makers would include ideas such as allowing producers to share financially in the success of their shows.

ITV is still restricted by public-service broadcasting demands and by a complex formula linking how much it can charge advertisers to ratings success. Mr Grade said it was wrong advertising was unregulated for online platforms such as Google while ITV “still labours under a host of anachronistic proscriptions”.