This long term plan talks about ‘a lean ITV that can create world class content, executed across multiple platforms and sold around the world’ while ‘half of ITV’s revenue base will be derived from non-television advertising sources.’

On paper this looks like a strong and much needed plan. ITV needs to respond to the challenges of new content distribution platforms and become a multiple revenue business.

However, linear broadcast TV is still a necessity for most advertisers, and more importantly must-see, appointment to view, mass scale, rapid reach building (insert other appropriate media planning clichés as you see fit) TV is an absolute must. Far from being a dying medium, it still has huge commercial potential. TV’s share of overall ad expenditure is significantly below other developed markets in Western Europe and the US, and within that ITV still has the strongest market position. 

So, through the drive to become a multi revenue business and reduce its debt further, ITV must not lose sight of its core strength -the ability to create programmes that advertisers can use to reach a lot of people very quickly in an engaging way (yes, TV advertising can still be engaging).

Specifically, there are two elements in the announcement worth thinking about in that context.

Firstly, the reduction of the ITV1 network programme budget to less than £800m for the next two years. This is still vastly superior to its commercial competitors, but let’s be clear, is less than it spent this year. What outcome will that have on the quality and therefore audience performance of ITV1 in the long run? Will declining programme budgets be able to support growth in advertising revenues?

And secondly, the agreement to make ITV2, 3 and 4 HD channels subscription only channels. At first glance, this might not appear big news, but ITV are making enough of a splash on it for us to speculate that pay TV is something they will increase their focus on over the course of the next five years. If so, will those channels be valued enough by viewers to more than replace lost ad revenue with subscriptions?

Time will tell on both, but it seems that Crozier’s cautionary stance has created a cautionary response from investors, so perhaps I am not alone in thinking that while this plan appears to be the right thing to do strategically, it also risks an overemphasis on new revenue streams at the expense of a commercially successful core product at this crucial time in the economic recovery.

Here, you will find some occassional thoughts about how the traditional/analogue/old-world/legacy* parts of the media industry will, can and are adapting to keep themselves out of the abattoir that is owned and run by those evil revolutionary slaughterers, for whom the collective noun appears to be Digital.

*Choose one, but know they are all totally interchangeable, largely meaningless terms to describe anything that was established before 1995 and is still in existence today.