Granada Industrial Dispute in ITV's Future?

Media Guardian reports that staff at Granada Media belonging to the NUJ, Bectu and Amicus will vote on strike action in a pay dispute after Granada imposed a 2% pay rise.

If the strike went ahead, it would affect output across all seven of Granada Media's ITV franchises.

This is a large blow for ITV and Granada, coming just a couple of months before the merger between Carlton and Granada takes place.

This highlights the danger of allowing ITV to be consolidated into one company. ITV's strength lay in the fact it was not one comapny but many companies. Such a strength should be particularly obvious now. Under the old-style ITV, you had 15 major production centres, and 15 companies that could have by now been working separately to create a myriad of channels in the multi-channel arena, alongside network ITV's efforts.

Instead we've had 3 companies trying to enter multi-channel arena, Carlton via cable channels and OnDigital, Granada via GSkyB and Scottish TV via Sky Scottish. Of all of these, mainly lacklustre efforts, only GSkyB remains with Plus and Men & Motors, alongside ITV2 and the ITV News Channel. GSkyB may not survive much longer as there are plans to transfer the material that Plus uses into an ITV Gold channel, and Men & Motors is hardly able to run by itself as a "primary" channel without Plus to pull in some prestiege advertisers for the prestiege programming.

Add to this, that this industrial dispute could take out, temporarily, half the ITV network in one go, and the ever present possibility that this new ITV plc company could fail, and by doing so take out not only most of the ITV network, but about a third of all new production in this country, and we are talking serious consequences that very few people seemed to have noticed. It could mean the end of the UK as a major television producer, with the US becoming more dominant than ever before.

ITV in crisis

ITV has been facing up to some major problems recently, and arguably, it has not been coping very well with them. In what has been a tough time for the commercial broadcaster, the ITV companies have faced major problems with ITV Digital, falling revenues from advertising, falling audience figures with BBC1 and Multi-channel TV benefiting the most and a greater than average number of new programme failures, including some very high profile ones such as Shafted. The question is, what happened to ITV to allow it to fall so far?

There are a number of potential reasons why ITV’s fall has been so bad. One potential reason can be traced all the way back to the creation of Independent Television back in 1954. Originally, the Independent Television Authority was supposed to have created 2 commercial networks, each with additional licenced programme providers. But it ended up being only one commercial network, and no additional programme providers, which made things difficult for Associated Rediffusion and ATV London in the initial months of Independent Television. These days, such an arrangement with additional programme providers licenced for ITV would undoubtedly have seen more of the old franchisees become production companies, and also some good companies that never quite made it to being franchise holders, providing programming. It would also make for a more competitive ITV in terms of programming.

Another potential reason why ITV is in possible crisis goes back to the 1990 Broadcasting Act. In the act, it allowed the ITV companies to merge with each other, and potentially be bought by other companies too. Why was this a bad thing? Well, ironically for the same reason that lack of additional licenced programme providers was a bad thing. Instead of having a competitive ITV with 15 companies and the threat of losing their franchise if they didn’t perform up to scratch, you now have just 5 companies, who know their licences are pretty safe, and therefore less competitive, less challenging and less satisfying in terms of programming.

Another potential reason lies in what has been recently a major situation in broadcasting terms, and that is the situation between ITV and Sky. In 1998, ITV decided not to launch on Sky Digital, despite the fact that BBC1, BBC2, Channel 4 and Channel 5 were all launching on both Sky Digital and On Digital. On Digital, nowadays know as ITV Digital, is owned by Carlton and Granada, the two biggest ITV companies. Granada have some history with Sky as Granada was involved in the British Satellite Broadcasting venture of 1990, which ended with BSB merging with Sky. Carlton had channels of its own that it didn’t want on Sky, and had previously restricted them to just Cable. Carlton and Granada felt that On Digital needed an advantage over Sky Digital, and they felt that ITV would give them that advantage. So ITV refused to launch on Sky Digital, and also refused to launch ITV2 on Sky Digital. This move was to prove costly in financial terms with many millions of pounds of advertising revenue missed because of this one move. ITV1 and ITV2 were to launch in 2001 on Sky Digital, but the damage had been done. The move had cost them advertising revenue, and it had cost them viewers too, and the longer they stayed off Sky Digital, the more it was going to cost them in terms of viewers and advertising revenue. So, they finally put up and launched on Sky Digital.

Another potential reason lies in the fact that On/ITV Digital always looked to compete with Sky Digital. Alongside the fact that ITV had been having something of a tiff with Sky for many years, going back to the lack of agreement between Sky News and ITN, over ITN acting as programme producer for Sky News, in 1988, and continuing through Sky’s failed attempts to replace ITN as ITV’s news provider, when you put all that together, you see ITV trying to compete with Sky, one by not providing ITV and ITV2 on Sky Digital, also by trying to use ITV’s advantage as a terrestrial broadcaster to persuade people to go to On Digital, owned of course by two of the biggest ITV companies. Put that very complicated mix together, and what do you have? You have a channel provider on Digital Terrestrial, trying to compete with a channel provider on Digital Satellite, where really they shouldn’t be competing at all. On Digital was the only licenced digital pay-TV provider for Digital Terrestrial, and Sky Digital was the only digital satellite pay-TV provider. In theory, they shouldn’t have been competing with each other as they were two different markets. However, in practice, people were comparing the Sky/On situation to the Sky/BSB situation of 1990, long before either side were actually transmitting digital programmes, and this wasn’t helped by On Digital themselves, whose advertising was at least initially quite blatantly stating their competitive agenda.

Whichever reason it was, and whichever way you look at it, it comes down to competition. Sky had had no real competition in the Multi-channel arena after their merger with BSB, and ITV in itself was less competitive because the number of ITV companies had dropped from 15 to 5, and because the franchises were no longer being seen as under threat every whit and while, so there was no pressure on ITV to perform. Now ITV is in this situation. To this writer, it looks like a crisis, a crisis of ITV’s own making. They wanted the ability to merge stations, to eventually become 1 giant national ITV. They wanted the franchises to be easier to renew, therefore creating less pressure, and supposedly more time for increased investment. They wanted the greener, less regulated grass on the other side of the fence. Now they’re there, they are finding it’s leaving a foul taste in their mouths, but instead of backtracking, ITV seek to blame the BBC and Sky for their own problems. There’s an old saying. It says, “You reap what you sow”.

So, how can ITV get themselves out of this predicament? Well, the only way they can do it is to go back to being more regulated, and back to being a commercially funded, not commercially driven, public service broadcaster. They must waste less money on unnecessarily extravagant set designs, cut down the amount that is just given away to shareholders, and start re-investing in the people who really count, the viewers.

Regional Rollercoaster

Out of all the channels that currently exist, only 3 channels provide a terrestrial regional service to the English regions, BBC-1, BBC-2 and ITV. Every other service available is national, pan-European or even international in focus.

So why are there so few regional services? The short answer is money. To provide a basic regional service, for instance to the West, South, East, Midlands, North, Wales, Scotland, and Northern Ireland, you have to find eight new locations for studios. To run the entire service from your broadcast headquarters, at least eight new transmission suites need to be built and suddenly we're talking hundreds of millions of pounds. Currently only Sky could even consider something like that.

The BBC offer a 14-region terrestrial service, covering the South West, West, South, South East, East, East Midlands, West Midlands, North West, North, North East and Cumbria, Channel Islands, Scotland, Northern Ireland and Wales, and are in the process of carving a 15th region out of the South East for London. A comprehensive service like this is the most expensive route to take, with the pick of the regional bunch, ITV, having 27 regional divisions operated by 15 licensees in 14 regions. A 27-region service requires 27 transmission suites, at a time where ITV tries to consolidate into a single company.

Even without consolidation, regional output has already suffered. The BBC used to produce some great regional feature programming, including "Floyd on Food" and "Secret Nature", both from the Southwest. The BBC picked up these shows nationally as well as many other programmes from the regions. The three main regional production centres for the network, Bristol, Birmingham and Manchester, specialise in certain types of productions. The only things the individual regions produce are local news, weekly topical news documentaries and a regional parliamentary programme. All are news based with no feature-based material at all - no fun stuff.

You might have expected ITV to pick up the slack here but the picture is similarly bleak. For instance, Westward and TSW had been great providers of regional programming, some of it being shown on the network. Successor company Westcountry, however, have produced only news and factual programming, with a tiny amount of entertainment-related material produced by local independents. Even after Carlton rebranded Westcountry, things did not really improved. Although the "Carlton Production" slide is seen a lot, the great majority of these productions are from London and the Midlands.

So regional programming has already suffered on television, and it looks like it will continue to suffer under a single ITV company coupled with light-touch regulation. Because being regional eats up money and profits, expect to see even less in the future.