ITV's Grade pledges 'content-led growth'
EmptyLONDON -- Michael Grade wants to double revenue from ITV's content businesses to £1.2 billion ($2.4 billion) a year by 2012.
The network's executive chairman unveiled that vision, part of a wide-ranging strategic review of the broadcaster, at a Wednesday press conference.
Grade said that Britain's leading commercial broadcaster is "entering a period of growth" and has assembled a £200 million ($406.3 million) war chest to fund U.K. and international production company acquisitions in the mold of its recent purchase of Jaffe Braunstein.
Grade's "content-led growth plan" is intended to deliver 3%-5% annual growth over the next three years and increase its online revenue to £150 million ($305 million) by the end of the decade.
The broadcaster's in-house creative division, ITV Prods. -- to be headed by former Sky programming head Dawn Airey -- will be charged with delivering the bulk of the growth.
The in-house division, which currently accounts for about 54% of ITV1's output, has been told in no uncertain terms to "raise its game" and contribute up to 75% of the broadcaster's fare. The division also is being called on to deliver more hit international formats such as "Hell's Kitchen," which has been successfully adapted around the world.
The division also is expected to supply the ITV1 network with an expanded range of high-quality, 60-minute dramas aimed at the 9 p.m. weeknight slot.
"We have leaked too much value to outside suppliers," Grade said, suggesting that the network has become too reliant on commissions from the independent sector.
"ITV Prods. has got to be more sensitive to the needs of the network," he added. "It has historically gone its own way."
But Grade stressed that ITV director of television Simon Shaps will have total freedom to select commissions based on quality, regardless of whether they came from in-house or the independent production sector.
"Simon and his team will only make choices based on quality. If they do anything else then we might as well just pack up and go home and stop trying to be a broadcaster," Grade told reporters.
Airey, who like Shaps will report to ITV COO John Cresswell, will take up her post at the commercial broadcaster within the next few weeks.
Grade said ITV will pay for the new investment "through greater efficiencies throughout the business" and will finance new ventures and acquisitions via the disposal of remaining non-core assets such as its holdings in a number of soccer clubs.
He added that ITV is on track to achieve its goal of claiming a 38.5% share of advertising reach for its ITV channels by 2012. Net advertising revenue was up 5% in the third quarter.
"By 2012, I want ITV to be widely acknowledged as the U.K.'s favorite source of free, original entertainment across all popular platforms and devices, not just on television," he said.
"The old ITV competed in a £6 billion ($12.2 billion) market -- the U.K. television advertising and program market. The new ITV will be operating in a market worth double that -- including new types of advertising, new and diverse revenue streams, all driven by our premium, mass appeal content, free to the consumer and valued by our advertisers," Grade said.