Media Analysis: Trouble at the Top

Marketing, August 2, 2006 | Go to article overview

Media Analysis: Trouble at the Top


The City may be calling for the head of ITV boss Charles Allen, but is he really to blame for its woes?

Poor old Charles Allen. The chief executive of ITV has become famed for his ability to cling on to his job against all odds, but even he must have realised from a glance at the runes that the game is up.

Allen, who has never been a darling of the City, has found himself almost constantly on the receiving end of criticism for his management abilities.

However, the situation has reached fever pitch in recent weeks as ITV's share price dropped below the psychologically important 100p mark. The smart money is now on Allen announcing his departure imminently and replacements are already being lined up.

Putting the City clamour to one side, there are some obvious questions that need answering. How much of the blame should really be laid at Allen's feet - has he just become a convenient scapegoat for the torpid ad market? And will the supplanting of him by another chief executive, whoever it may be, make any difference to the company's future, or is ITV a fundamentally flawed business?

The most obvious problem is ITV1's schedule. Programmes such as reality TV show Love Island, which is managing to scrape together little more than 2m viewers, entertainment series It's Now or Never, which performed so poorly it was axed after just one episode, and even stalwart Coronation Street, which has seen its audiences fall perilously low, are indicative of the broadcaster's woes.

All these shows are made internally, which insiders say is a big part of ITV's problems. Historically, before ITV became a merged entity, its main supplier of programming was Granada, under the leadership of Allen.

Subsequently, instead of focusing on ITV as a broadcaster, critics say management has continued to run the company as a production business, whereby they pay themselves for making programmes. However, in ITV's current incarnation, this simply means moving money around an internal market.

It is the dismal performance of ITV1 as a core channel, which still accounts for the vast majority of ITV's revenue, that leaves Allen, and his director of television Simon Shaps most vulnerable. If and when a new chief executive is named, they would do well to ensure that rather than commissioning a programme because it is made in-house, they look at buying in what will perform best on the channel regardless of its source.

An improved schedule would also alleviate the pressure on ad sales, overseen by commercial director Ian McCulloch. After all, the decline in adspend being suffered by all the UK TV channels is cyclical in nature and a better promotional effort would no doubt see it return.

'Brands are massively undervaluing the power of TV and the long-term effects are catastrophic,' says Martin Bowley, chairman of the British Television Advertising Awards. …

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