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Last Updated: Wednesday, 7 March 2007, 20:30 GMT
ITV must do better, admits Grade
ITV chief Michael Grade
MR Grade has vowed to shake-up ITV's programming

ITV's new chief executive has admitted the commercial broadcaster must improve its programming after the group posted a drop in full-year profits.

Michael Grade said some shows were "creatively bankrupt" and ITV must improve its creative ambition, be more innovative and take risks.

Pre-tax profits fell to 288m ($555m) in the 12 months to 31 December from 311m in 2005.

But ITV believes sliding advertising revenues are set to stabilise.

ITV blamed a "challenging" advertising market for the fall in annual profits as revenues fell 8% to 1.49bn. ITV1 ad revenues slipped 188m to 1.28bn.

We've stuck the word celebrity on the front of a copied format and pretended that's good enough
Michael Grade

But, strong growth at ITV's digital channel helped offset some weakness at its flagship ITV1 channel.

Advertising hopes

Looking ahead, the group believes the advertising market for all broadcasters will stabilise.

Graph of ITV shares

It expects overall UK advertising revenues to grow by 0.5% in the first three months of the year, a factor that may help stem its decline in revenues.

The group is also looking to shrug off its contract rights renewal scheme, which limits the amount of money the firm can demand from advertisers making it even more difficult to make money.

The deal was one of the factors that led to the departure of former chief Charles Allen.

ITV TOP RATED SHOWS OF 2006
World Cup (England v Sweden)
World Cup (England v Trinidad)
Coronation Street
Dancing On Ice - The Skate Off
Lewis
Wild At Heart
The X Factor Results
A Touch Of Frost
I'm A Celebrity ...
Emmerdale

Mr Grade - who before joining ITV had been chairman of the BBC - also admitted that the firm had "taken its eye off the ball" as the result of its merger with Carlton last year and was "playing catch-up in many areas".

As a result, he has pledged to improve its programme offering, cut bureaucracy and develop the firm's new media offering - as he admitted many of the current offerings were not good enough.

Improvement plans

"We have been very quick to copy other people's formats. We've stuck the word celebrity on the front of a copied format and pretended that's good enough," he said. "It's creatively bankrupt, to be honest, and we have got to wean ourselves off the habit.

"Our overall strategy is right, but we need to improve our allocation of resources in order to accelerate the rate of improvement across all our businesses," Mr Grade said.

"In a fragmenting market you've got to be at the cutting edge of programming," he told BBC Radio 4. The firm is pumping 1bn into its shows.

The company is currently embroiled in a scandal over premium-rate phone-in quizzes, a move that has prompted the group to suspend such competitions.

BBC business editor Robert Peston
There are seven fundamental challenges facing Michael Grade...
Robert Peston,
BBC business editor

Among the shows affected by the scandal are Saturday Night Takeaway, Dancing On Ice and This Morning. The problems are being investigated by premium-rate watchdog Icstis.

However, Mr Grade vowed that the phone lines would return once an internal review had been carried out to examine the systems and ensure the public could "trust what we are doing".

ITV has also recently hit the headlines as it has been at the centre of a takeover spat between Virgin Media and BSkyB.

BSkyB later bought a 17.9% stake in the firm, a move which is now the subject of an Ofcom investigation.


SEE ALSO
How Grade hopes to revitalise ITV
07 Mar 07 |  Entertainment
ITV suspends premium phone-ins
06 Mar 07 |  Entertainment
OFT starts formal BSkyB-ITV probe
12 Jan 07 |  Business
Ad ban plan 'threatens TV shows'
05 Feb 07 |  Entertainment
ITV rattled as ad revenues fall
19 Dec 06 |  Business
NTL ends takeover interest in ITV
06 Dec 06 |  Business
How can Grade revive ITV's shows?
28 Nov 06 |  Entertainment

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