To put this into context, ITV’s anticipated pre-tax profits of £300m (due to be announced Wednesday) on a revenue of about £2bn nearly all come from the sale of TV spots (up 16 per cent over the course of the year and still booming away) and programme sales from ITV Studios.
Digital revenues are expected to hit £20m, one per cent of the total.
Yet ITV’s new strategy from CEO Adam Crozier (left) and chairman Archie Norman is built around digital and new sales boss Fru Hazlitt and her recent signing Simon Daglish from MySpace have defenestrated former sales boss Gary Digby and his team because they didn’t ‘get’ digital (low-priced online sales) and were too obsessed with wringing money out of media agencies for spot advertising.
Which is where all this money has been coming from.
This is a bit like the CEO of Marks & Spencer being fired because he or she didn’t sell enough Marmite.
ITV’s problem as a listed company is that it doesn’t have the balls to say to the City that it’s a cyclical business dependent on premium-priced advertising and, as such, it’s one of the first companies to go into a recession and one of the first to come out.
Just like banks, which don’t seem to have too many problems persuading their shareholders to accept the bleedin’ obvious.
So it constantly feels the need to keep producing unconvincing smoke and mirrors saying it’s going to be a digital company or a content company or anything other than what it is – a broadcast advertising company.
The mighty Google now says it’s an advertising company (even though it’s still really a search and technology company) so there’s nothing unfriendly or unfashionable for investors about being an advertising company.
ITV would find life a lot easier if it put all this digital stuff into context (another source of revenue which it could be better at).
If there was ever the case of a company with a strategy that completely confounds its commercial reality it’s the new ITV.