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24 July 2000

The fight for TV’s toothless comb

Who cares whether Granada or Carlton wins? The real question is whether ITV can survive at all, argu

By David Cox

As Britain’s media giants battle for domination of ITV, the excitement can be felt far beyond the City. This time, the corporate prize at stake is not a chain of hotels or a faceless mobile-phone company. It is the home of Coronation Street and Emmerdale, Blind Date and Who Wants to be a Millionaire? – the nation’s great entertainer.

Yet those within the inner sanctums of Carlton, United and Granada Media – although each would naturally like to come out on top – do not see the struggle in quite such momentous terms as you might expect. They know something that the City apparently does not. It is that the great prize at the heart of this contest is actually a mirage. Barring a miracle, Britain’s top TV channel is on the way out – perhaps quite quickly.

“This is a fight about who gets to be quartermaster on the Titanic,” I was told by one of the contending companies’ brightest strategists. Like most of his colleagues, he is concerned less about who gets to run the ITV network than with a desperate and uphill scramble to find new outlets for his company’s skills, production capacity and programme libraries.

Until now, ITV’s task has been to rake in vast revenues by offering advertisers huge audiences assembled through programmes of broad appeal across different age groups, social classes and geographical regions. Now the whistle is being blown on this game. Technological change is about to transform the TV viewing experience (see this week’s New Statesman supplement). Not only are we to be confronted by a vast array of choice; we shall also be able to select from this cornucopia exactly what suits our tastes, easily and often automatically. Research has shown that in these conditions people watch whatever they really like. That may mean cartoons, football or movies – and hardly anything else. What there is no longer much call for is all that stuff we watch because there is nothing else on: mediocre dramas, dull quiz shows, hopeless sitcoms and the rest.

ITV is exactly the kind of channel whose audience vaporises. Its problems will be compounded by its failure to innovate in recent years, and its reliance on tired formats which it was able to feed successfully only to what was, in effect, a captive audience. “What we’re good at is shooting fish in a barrel,” as an ITV man put it to me cheerfully. But this is only the beginning of ITV’s woes.

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The new technology will mean that we do much less viewing “live” and pre-digest most of what we see, cutting out commercial breaks in the process. Once we start doing this, advertisers will no longer be prepared to pay ITV’s exorbitant rates, and its revenue will fall off a cliff. It will then be unable to afford to make decent programmes, so its audience will fall further, making it worth even less to advertisers. Then things get really bad.

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ITV companies need money not only to make programmes, but also to pay the rent for the airwaves on which they transmit. Other people want those airwaves and they are prepared to pay far more than the ITV companies. The explosion in communications of all kinds, most obviously in mobile telephony, has made the frequencies on which ITV transmits highly desirable to telecoms operators. If the government hands over these frequencies to the telecoms, it stands to net another huge windfall like the one it has just netted from the mobile-phone auction.

Wouldn’t many voters then be deprived of any television? Not a problem. So much money is involved that the government could pay for free cable connections or satellite dishes for everyone out of the proceeds. Or the telecoms companies might happily provide us all with new high-capacity “broadband” links, through which they could sell us other services as well as television.

So even the least enterprising viewers would gain access to the new television world. And these are exactly the viewers on whom ITV would otherwise fall back, as those with the wit to do so deserted it for more appealing pastures. There would then be no hiding place for ITV.

Is there, however, a miracle that could save at least a rasher of ITV’s bacon? Well, some of its executives seem to think there might be. They appear to have noticed that, in the maelstrom about to engulf their industry, it is the BBC, oddly enough, that is actually sitting prettiest. Not for the corporation the terror of evaporating advertising revenue. Instead, it is guaranteed not only free access to the airwaves, but an income, raised through a poll tax, that will increase annually by more than the rate of inflation. Why? Because its programmes are meant to fulfil a social purpose, rather than make money. Could this be the way out for ITV, too?

Until recently, ITV’s bosses have seemed desperate to jettison what remains of their public service obligations, most obviously by axing News at Ten. It was widely assumed that they would look to the impending communications review for the abolition of the remaining restrictions on their network, so they could compete more easily with their new, unfettered rivals on cable and satellite. In Whitehall, civil servants were quite ready to recommend exactly this.

Then, however, at the beginning of this month, David Liddiment, ITV’s director of programmes, wrote an article for the Independent which sang a very different tune. Instead of demanding freedom from constraints, he pleaded for continued regulation to enforce public obligations on his network, albeit in a less onerous form. What was this all about? Perhaps the answer can be found between the lines of another article, this time by ITV’s most thoughtful guru, Barry Cox (no relation of mine), in this week’s New Statesman supplement. Cox, too, pleads for ITV to continue to be regulated as a public service broadcaster.

Cox would have us believe that the network’s barons are deeply committed to regionalism, quality and social purpose. He goes on to suggest, however, that, in return for their contribution to the public good, they should be guaranteed continued access to the airwaves at a vastly subsidised rate. In the past, ITV executives have been known to suggest that they should get a slice of the licence fee to pay for their own worthy programmes. All of a sudden, it becomes possible to see how a place, however small, could at last be secured for ITV in the new broadcasting firmament.

Yet why should the government forgo revenue from the telecoms companies, which could be spent on schools and hospitals, just to keep ITV in something of the style to which it has become accustomed? Cox’s answer is that, if ITV ceases to operate as a public service broadcaster, the BBC and Channel 4 will effectively cease to as well. They need the competition, he suggests, to keep them on their toes.

It is an argument that would once have made good sense. Before ITV franchises started going to the highest bidder, they were distributed in a “beauty contest” according to the perceived quality and social value of applicants’ programme proposals. In the 1970s, this system made ITV the market leader in public service television. Weekend World blazed a trail in current affairs that the BBC was forced to follow. The South Bank Show showed the BBC that arts programming could be both serious and relatively popular.

The problem is that ITV’s hastily rediscovered commitment to public service broadcasting cannot any longer be taken seriously. A commitment to cynical opportunism is far more obvious, and not only from the News at Ten debacle. In the late 1980s, the ITV companies decided to transform their network systematically into a wholly commercial channel, and to treat any remaining public service obligations as no more than obstacles to be circumvented. With this strategy, ITV became immensely profitable. Not surprisingly, however, it failed to impress in any area of public service television, even though it is still required to provide nine different kinds of programming for public policy reasons.

ITV chose to live by the market. Now that the market threatens it with extinction, it is hard to see anyone buying the idea that such a loudly self-proclaimed whore could or should be reborn as a madonna. Yet this last throw of the dice seems to be all that this otherwise doomed network has left in its locker.

Take your seats by the ringside for what may prove the most colourful contest that ITV has so far brought you, on or off the screen. But all that awaits the victor of this prize fight is the proverbial toothless comb. May the best man win.

The writer is a former executive at London Weekend Television