'Digital Switchover is today a done deal in 90% of UK Homes' - Grade
Michael Grade yesterday gave an important and interesting speech to the Royal Television Society where he
set out the options for ITV-1. The speech is ITV's response to the Ofcom Public Service Broadcasting Review.
He said that the "A new settlement needs to be formulated to sustain the health of British broadcasting, and the talent and creativity on which it thrives. It needs to be done urgently, and it needs to be implemented before the end of 2012."
Adding "There is no alternative but to reconfigure the system. The world of 1991 - when the present ITV licences were designed - has gone for ever. Back then there were only a handful of television channels. ITV still had an effective monopoly of television advertising: Channel 4 was yet to go it alone; Five yet to be created; Sky's penetration just 5%. And those 1991 licences were themselves based on a model with even earlier roots: 15 regional licences designed in 1955 to fit the analogue transmitter map of that era."
If we overlook that slight contraction of ITV history (there was only one ITV company in 1955, and only 13 by 1964), it seems that we have moved passed ITV being a "local television" company in any way. He continues:
"We were still thinking then of Digital Switchover being a distant event with no date set. DSO is today a done deal in 90% of UK households. 2012 is now just the technical date for turning off the last of the old analogue transmitters. We are already making decisions and commitments which have consequences beyond 2012. Ofcom is right, we need a new settlement that works and one that will endure"
He then accepts that the PSB status still provides obligations and benefits:
"If we opt to remain a PSB, we would accept licence obligations for UK programming and impartial prime time network news. The PSB licence would in effect be the guarantee that they would be delivered. In return, we would continue to enjoy the benefits of gifted spectrum and a prominent EPG position."
He then suggests that ITV could dump the PSB status, but still keep the 45% of multiplex 2 that is provided to the "Channel 3 Public Service Broadcaster".
"If we choose to operate without PSB status, ITV could buy its existing DTT spectrum at the market rate - with the proceeds possibly available to other PSB broadcasters. Alternatively we could simply buy commercial DTT capacity in the market. ITV would enjoy a unified brand, with the widest UK coverage through DTT and other platforms There would be no regulatory prescription - the lightest touch. Of course without a PSB licence there could be no guarantee of any particular type or level of programme provision."
Selling ITV a perpetual right to 45% of Multiplex 2 and EPG slot "3" would reduce the amount of public service broadcasting, of course. He then lists these principles.
i. The benefits of a new settlement must at least match the costs it imposes.
ii. ITV does not itself want any direct public money. We wish only to operate as a free-standing commercial business, with less rather than more regulation
iii. Universality: ITV-1 is a popular national service. Viewer expectations and economics dictate that it must retain the widest coverage of the UK.
iv. We must have a unified ITV brand. Wherever the ITV network schedule is available, ITV must be able to manage the control of the brand. More coherent branding of the network across the UK would provide a level playing field to compete against the unified brands of the BBC and Sky.
v. Certainty. After years of discussion, consultation and regulatory adjustments, and with an existing right to licence renewal, there is no value in the distraction of any protracted tender process for future licences with modest value. I honestly do not believe the industry could survive such an expensive and unnecessary disruption.
vi. We expect to operate in a free market, and on fair market terms with our competitors, customers and suppliers. All future regulatory requirements beyond our commitment to programme investment and news must reflect this.
So, this all means that ITV will dump the regional news service and just keep ITN to do a 6pm and 10pm news, but without any actual commitment.
It could be that ITV pulls out from all PSB commitments sooner rather than later. Ofcom has already shown that it is not minded to "pull the plug" when ITV drops PSB commitments (like the fait acomplis of removing children's programmes from ITV1).
ITV-1 without regional news, what do you think?