The new management (initiated in September 2007) at European media giant ITV Plc has adopted a three-pronged approach to turnaround the fortunes of the company. The three primary area of focus are: 1) Broadcasting; 2) Production; and 3) Online. I have summarized the approach below with action points against each of them that the company has published for the benefit of its shareholders.
Broadcasting
ITV’s turnaround strategy for broadcasting is: 1) achieve family share of commercial impacts (SOCI) of 38.5% in 2012 (including GMTV). This was a target first laid out by Charles Allen; 2) accelerate ITV1 SOCI recovery; and 3) invest in ITV2 to make it become the No.3 commercial network for 16-34 year olds behind ITV and Channel4.
Broadcasting
ITV’s turnaround strategy for broadcasting is: 1) achieve family share of commercial impacts (SOCI) of 38.5% in 2012 (including GMTV). This was a target first laid out by Charles Allen; 2) accelerate ITV1 SOCI recovery; and 3) invest in ITV2 to make it become the No.3 commercial network for 16-34 year olds behind ITV and Channel4.
There are eight actions associated with this plan: 1) Launch a new successful schedule at 9pm; 2) increase the ITV1 budget by only 1-2% pa, less than inflation; 3) work on Public Service Broadcasting (PSB-ongoing); 4) work to replace contract rights renewal (CRR); 5) invest in ITV2; 6) take share of advertiser budgets via advertiser-funded programming and product placement (ongoing); 7) take high-definition (HD) onto Freeview (joint plan in place), launch Freesat (achieved); and 8) launch ITV1 HDTV channel (achieved on Freesat and ITV refused to put it on Sky).
Production
ITV’s strategy for production includes a plan to 1) double content revenue from £600m to £1.2bn by 2012, this is a CAGR of just over 16% pa; and 2) grow ITV Production’s share of the ITV1 programming schedule.
The key actions associated with this strategy are: 1) create a single division with a talented creative leader (Dawn Airey); 2) move into high value genres. Here the plan is to accelerate long-running drama, factual and entertainment formats and comedy. It is also to do more documentaries, lifestyle, game shows and quiz shows, and content for new media. Lastly, it is to reduce one-off drama; 3) increase UK development spend; 4) introduce a more flexible strategy to attract talent, including co-production and part-ownership of independent producers; 4) expand international sales, building on the success of Hell’s Kitchen in the US and Dancing on Ice in Europe; and 5) spend up to £200m on acquisitions. The £200m is to be funded by disposals of existing businesses. Target size is businesses with sales of £10m-50m.
Online
ITV’s online strategy is to 1) achieve £150m of online revenue in 2010; and 2) make itv.com into a top-10 UK entertainment site by 2010.
This comes with four action points: 1) grow viewing of ITV on-demand content; 2) develop specialist online sites around key programme brands and communities; 3) build online advertising sales excellence; and 4) explore adjacent digital businesses.
According to comscore (April 2008) itv.com is now thirteenth in the UK, having been twelfth in September 2007. The company may look at acquisitions (ad network, for example) to approach its targets.
ITV’s new initiatives include Gaming Sites and Kangaroo.
Gaming sites
ITV is producing gaming sites for “soft-gaming” based around program brands such as Emmerdale (bingo), Countdown and Family Fortunes. The company has struck a deal on soft-gaming with Party Gaming.
Kangaroo
The BBC, ITV and Channel4 have formed a JV with the working title Kangaroo to be a showcase for their content online, in addition to their own websites and in addition to their syndication agreements. Kangaroo is an interesting response to the dominance of US internet companies of online video consumption, specifically YouTube. In the US, the share of videos viewed taken by Google, which owns YouTube, is increasing rapidly, whereas the share taken by the traditional companies is languishing or declining, with the exception of ABC, which is still very small. It was also formed with the decline of the sales of the traditional record labels in mind and the rise of pirate music services and the domination of the legal download market by Apple and iTunes. The UK broadcasters did not and do not want to be beholden to YouTube for the distribution of their precious content online – they need to have their own shop window and their own route to the consumer. This idea was also behind Hulu, a JV between US broadcasters.
According to Mediaweek, ITV is reportedly readying a price comparison site called Priceterrier.com
Production
ITV’s strategy for production includes a plan to 1) double content revenue from £600m to £1.2bn by 2012, this is a CAGR of just over 16% pa; and 2) grow ITV Production’s share of the ITV1 programming schedule.
The key actions associated with this strategy are: 1) create a single division with a talented creative leader (Dawn Airey); 2) move into high value genres. Here the plan is to accelerate long-running drama, factual and entertainment formats and comedy. It is also to do more documentaries, lifestyle, game shows and quiz shows, and content for new media. Lastly, it is to reduce one-off drama; 3) increase UK development spend; 4) introduce a more flexible strategy to attract talent, including co-production and part-ownership of independent producers; 4) expand international sales, building on the success of Hell’s Kitchen in the US and Dancing on Ice in Europe; and 5) spend up to £200m on acquisitions. The £200m is to be funded by disposals of existing businesses. Target size is businesses with sales of £10m-50m.
Online
ITV’s online strategy is to 1) achieve £150m of online revenue in 2010; and 2) make itv.com into a top-10 UK entertainment site by 2010.
This comes with four action points: 1) grow viewing of ITV on-demand content; 2) develop specialist online sites around key programme brands and communities; 3) build online advertising sales excellence; and 4) explore adjacent digital businesses.
According to comscore (April 2008) itv.com is now thirteenth in the UK, having been twelfth in September 2007. The company may look at acquisitions (ad network, for example) to approach its targets.
ITV’s new initiatives include Gaming Sites and Kangaroo.
Gaming sites
ITV is producing gaming sites for “soft-gaming” based around program brands such as Emmerdale (bingo), Countdown and Family Fortunes. The company has struck a deal on soft-gaming with Party Gaming.
Kangaroo
The BBC, ITV and Channel4 have formed a JV with the working title Kangaroo to be a showcase for their content online, in addition to their own websites and in addition to their syndication agreements. Kangaroo is an interesting response to the dominance of US internet companies of online video consumption, specifically YouTube. In the US, the share of videos viewed taken by Google, which owns YouTube, is increasing rapidly, whereas the share taken by the traditional companies is languishing or declining, with the exception of ABC, which is still very small. It was also formed with the decline of the sales of the traditional record labels in mind and the rise of pirate music services and the domination of the legal download market by Apple and iTunes. The UK broadcasters did not and do not want to be beholden to YouTube for the distribution of their precious content online – they need to have their own shop window and their own route to the consumer. This idea was also behind Hulu, a JV between US broadcasters.
According to Mediaweek, ITV is reportedly readying a price comparison site called Priceterrier.com
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Good to see you back in Action
Thanks, im glad to be back in action.
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