Michael Grade outlines tough decisions for ITV's future
08/10/2008
Michael Grade today underlined the tough choices faced by ITV as it considers its future as a public service broadcaster. In a speech to the Royal Television Society this morning (Weds), Grade outlined two alternative options for ITV’s future, in response to the publication of Ofcom’s Phase 2 report on Public Service Broadcasting in the UK.
In the first model, ITV would retain its public service status and provide guaranteed levels of original, UK programming and an impartial national and international news service in return for PSB benefits. The second option would see ITV operate without PSB status as a purely commercial brand. This option would mean no guarantee of any particular type or level of programme provision.
Grade outlined six basic principles which ITV will use to judge the refined options:
1. The benefits of a new settlement must at least match the costs it imposes.
2. ITV does not itself want any direct public money. We wish only to operate as a free-standing commercial business, with less rather than more regulation.
3. Universality: ITV1 is a popular national service. Viewer expectations and economics dictate that it must retain the widest coverage of the UK.
4. We must have a unified ITV brand. Wherever the ITV network schedule is available, ITV must be able to manage the control of the brand. More coherent branding of the network across the UK would provide a level playing field to compete against the unified brands of the BBC and Sky.
5. Certainty: After years of discussion, consultation and regulatory adjustments, and with an existing right to licence renewal, there is no value in the distraction of any protracted tender process for future licences with modest value.
6. We expect to operate in a free market, and on fair market terms with our competitors, customers and suppliers. All future regulatory requirements beyond our commitment to programme investment and news must reflect this.
Grade reinforced the need for immediate regulatory reform and gave his perspective on the Ofcom models:
“A new settlement needs to be formulated to sustain the health of British broadcasting, and the talent and creativity on which it thrives. It needs to be done urgently, and it needs to be implemented before the end of 2012.”
“Ofcom’s new formulation includes an evolutionary approach in which ITV would indeed stay as a PSB. Both the other options foresee a future in which ITV would not have a PSB licence,” he added.
“In our submissions to Ofcom, we have said that we would prefer to remain a licensed PSB, if justified economically. However, on face value, either route – PSB licensed or fully commercial - is capable of providing a viable basis from which ITV could continue to follow its content-led strategy, and deliver value for viewers, advertisers and shareholders.
“If we opt to remain a PSB, we would accept licence obligations for UK programming and impartial prime time network news. The PSB licence would in effect be the guarantee that they would be delivered. In return, we would continue to enjoy the benefit of gifted spectrum and a prominent EPG position.
“Ofcom’s description of the PSB options comprises a single pan-UK licence, or alternatively four national licences. But we also think that the present licence configuration should not be overlooked. It could offer a third potential starting point for an evolutionary solution. we are rather surprised that Ofcom has apparently excluded it, as it might provide the least disruptive course for a making the transition to a radically new settlement.
“If we choose to operate without PSB status, ITV could buy its existing DTT spectrum at the market rate – with the proceeds possibly available to other PSB broadcasters. Alternatively we could simply buy commercial DTT capacity in the market. ITV would enjoy a unified brand, with the widest UK coverage through DTT and other platforms. there would be no regulatory prescription – the lightest touch. Of course without a PSB licence there could be no guarantee of any particular type or level of programme provision.”
He concluded: “All parties acknowledge the importance of the creative industries to future economic growth in the UK. ITV stands ready to make its unique - and irreplaceable - contribution.
“I have shown this morning how I believe that can be achieved. There is a big prize to be had. ITV will remain the engine that drives massive investment in UK production. It will continue to make the programmes that viewers across the UK value most. And in doing so it can still provide a highly visible and competitive platform for news – national, international – and regional. So let’s get on with it and make it happen, so that when the old analogue signal is finally switched off, we have in place a new deal that works in the digital age. Only prevarication can stop us getting fit for 2012.”
Ends
For further information:
ITV Communications
Ruth Settle, 020 7156 7233
Mike Large, 020 715 67359
James MacLeod, 020 715 67236