Grade tells Lords his requirements for ITV’s future
ITV’s chairman Michael Grade has confirmed the broadcaster’s desire to remain a public service broadcaster, but with a number of key conditions to allow the organisation to remain competitive.
Speaking before the Lord’s PSB Committee hearing yesterday, Grade outlined ITV’s views towards last week’s public service broadcasting review conducted by Ofcom (see Ofcom rejects top-slicing the BBC’s funding).
Under Ofcom’s recommendations, ITV would be “freed up” to concentrate on “making entertaining, engaging UK content, including national and international news, but with limited public service commitments”.
Grade welcomed Ofcom’s recommendations but also outlined a number of key requirements for ITV going forward – these include easing CRR restrictions, seeing Project Kangaroo pushed through, ITV’s out of London quota reduced, the government to endorse product placement and for ITV’s inventory and airtime to be less heavily controlled.
One of Grade’s other priorities is to “not pay more the spectrum than what it is worth to [ITV]” – which is currently around £35 million, according to Ofcom.
In terms of news, Grade said: “We want to cover news anyway – impartial, independent national and international news – in order to provide a service to our viewers. It’s one of our priorities but we can’t guarantee it.
“Regional news will be challenged from 2011 as we can’t afford to pay for it. However, we can provide airtime and reach through our licenses, so we’re happy to be agents for that,” he added.
Ofcom is currently pushing for the establishment of an “independently funded consortia” to deliver news to Scotland, Wales and Northern Ireland and regions in England.
Grade said: “What is attractive about Ofcom’s solution, is that it’s a new vehicle, which would be funded by excess digital license fee. It is an exciting opportunity and could involve regional news and newspaper synergy, with just a small amount of funding”.
Grade believes it is important for ITV to maintain public service commitments in order to offer viewers an alternative news source to the BBC, “because while Sky News offers a great service, it’s not guaranteed and PSB should guarantee plurality,” he said.
He says in order to sustain news output, consolidation remains a viable proposition because if there’s no extra money, there will be no guarantee – which will mean BBC will have a monopoly.
Ofcom’s review also backed the idea of competitive funding as a solution to deliver PSB content – as “rising costs mean that commercial stations like ITV may stop making PSB programmes altogether unless there are major changes to the way it is funded”.
“If action is not taken now then programmes such as regional news, current affairs, children’s programming and some types of drama and documentaries will in the future only be available on the BBC,” Ofcom’s report said.
This could also lead to a large degree of homogeneity across commercial networks, which would reduce content options for advertisers.
Grade said ITV’s current CRR restrictions stop the broadcaster from being able to produce more diverse and “quality” content, such as Lost in Austen, as it is forced to chase larger ratings.
Under the current CRR regulations, ITV can’t monetise on lower rating programmes, which “prohibits [ITV] from doing what it needs to do in the downturn,” according to Grade.
“The regulations are now out-of-date and in appropriate – ITV needs more freedom in the ad market,” Grade said. “ITV’s investment in to UK originated content makes it a premium brand. Advertisers have plenty of choice.”
However, Five’s chief Dawn Airey disagrees: “We want CRR maintained otherwise ITV will have market dominance. The current CRR regulations provide a safeguard for the industry.”
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