Prime-time production budgets are to be increased by "several" million (nowhere near the pounds 40m rumoured in recent days). A dozen blockbuster films scheduled for broadcast later this year and in 1996 have been brought forward. ITV companies are also pressurising the Government to award digital channels to existing licence holders, allowing them to develop additional streams of programming.Leslie Hill, the chairman of ITV, said: "We are not prepared to sit back and have someone take our market share." Hill concedes that the short-term moves are in direct response to lacklustre ratings "Recently, there have been a few poor months. We had to react."The quick response is largely the work of Marcus Plantin, head of ITV Network Centre. He put together the new strategy, and sold it to ITV chiefs at a meeting late last month.Action was clearly needed. Rationalisation and cost-cutting in recent years have had negative effects on programming. That was fine for as long as the BBC floundered, producing weak dramas and humourless comedy.
But the public broadcaster has lately recovered its form.Putting on a brave face, Michael Green, chief executive of Carlton Communications, operators of the London weekday and Central licences, told media analysts privately that the BBC had made its recent strides by copying ITV He vowed to fight back. "We will surprise you," he told his City audience.Is Plantin's plan enough to stop the rot? Critics of ITV, unsurprisingly, say no. They point to a decline in quality and a lack of imagination in scheduling and commissioning. The ITV companies are complacent, they argue - too happy to reel in monopoly profits and not clever enough to prepare for increased competition from satellite, cable and digital TV. "These guys have been granted a licence to print money," said one pay-TV executive. "They don't like competition."For their part, advertisers have their own agenda.
Their association recently recommended extra air time for commercials and, once again, a new slot for News at Ten to free the evening for uninterrupted films - uninterrupted, that is, except by adverts. Advertising rates have increased well ahead of inflation in each of the past two years. Big spenders don't like that; declining audience figures merely intensify their anger.They are impatient for the debut of Channel 5, if that is what it takes to temper future rises in advertising rates. Bidders for the Channel 5 licence expect to win a comfortable share of the national audience within two years, perhaps as much as 12 to 15 per cent.
Generally lower ad rates should result.In the longer term ITV's real threat may come from the non-terrestrial sector. Senior ITV executives, as well as Channel 4's Michael Grade, have added their voices to the throng complaining to the Government about BSkyB's stranglehold on the pay-TV market - particularly its control of major Hollywood output and sports coverage."The UK Government has been extremely dilatory in dealing with the monopoly BSkyB enjoys," Michael Green said at an industry conference last month.BSkyB's response to ITV sniping is blunt. "They are worried about the introduction of digital television," says David Elstein, head of programming BSkyB is preparing to go digital by early next year. And complaints, no matter how vociferous, cannot change the underlying trends. Cable and satellite combined may have a miniscule market share, but the numbers are growing, if slowly, with Sky's sports and movie channels leading the way along with the BBC-fed UK Gold. About 4.5 million homes in Britain now have either satellite or cable.
That could reach 10 million within five years.Just signing up for cable or satellite does not necessarily mean viewers will abandon the BBC and ITV. Indeed, households with the new alternatives still watch the traditional channels more often than Sky or other services. But internal studies by the BBC suggest that the audience share of the "traditional" broadcasters will drop from 85 per cent to about 60 per cent within five to 10 years.Cable and satellite are already making small inroads into ITV's share of the advertising market. In 1993, all the ITV companies combined took 78 per cent of the pounds 1.9bn spent on commercial TV advertising, compared to 17 per cent for Channel 4 and 5 per cent for cable and satellite. By last year, ITV's share was down to 75 per cent, while Channel 4 took 19 per cent and satellite and cable 6 per cent.There may be another threat on ITV's horizon: a fully commercial BBC.
