Can ITV Do Digital?
Whilst today’s results from ITV will largely be blamed on the economic downturn and subsequent reduction in advertising spend, it’s clear that the figures are also a symptom of the company’s failure to stay ahead of the curve as the whole media landscape has evolved. Since the failure of ITV Digital, the company has been slow to react to new opportunities presented by emerging technology such as video on demand and social networking in order to provide innovative digital content around its programming and extend its advertising inventory.
The constant comparisons with the BBC, with its 28,000+ employees and guaranteed funding of more than £4 billion per year are perhaps unfair but it is clear that ITV has not kept up with innovations across the broadcasting industry more broadly. Michael Grade will point to the network’s public service remit and heavy regulation as reasons for the lack of investment in digital but similar restraints have not prevented Channel 4, the first of the major channels in the UK to launch an online video on demand service, from developing exciting digital propositions. When appropriate they have reached beyond their own website launching a presence in Social networks in order to add significant value to sponsorship deals with companies such as BSM (Skins). They have also not been afraid to venture in to other media with the launch of digital radio stations, although these plans have since been curtailed.
There is no doubt that ITV have made strides to catch up with the competition. The ITV.com site is now awash with video content and ITV programmes can be purchased in the iTunes store but these initiatives’ still leave ITV playing catch-up.
Perhaps the best example of its status as a technological laggard is their purchase in December 2005 of Friends Reunited in a cash and shares deal worth up to £175 million. The purchase came at a time when much more fully featured, free to use social networking sites such as MySpace and Facebook were emerging.
It comes as no surprise then, to hear that Friends Reunited is now up for sale along with ITV’s business directory site Scoot.com. Nevertheless, it’s clear that the internet will need to play a major part in a turnaround of fortunes for the company and it will be interesting to see whether Grade can get his company ahead of the curve and back in the black.
