Now or never for allen to pick own time to go

By Dan Sabbagn

It’s hard to think of Phillip Schofield ending a man's career, but the disaster of it's Now or Never is just another reminder why the scales are tipping against Charles Allen. Only 1.7 million watched Schofield's Saturday night show – the sort of flop the ITV chief executive could do without as the rumours swirl about his future.

So far, 2006 has been so difficult that it is easy to see why Mr. Allen might be thinking about getting out after 15 years of television while he may be able to time his exit This year has been particularly bereft of good news: a horrible advertising market has come in a year when the football World Cup failed to deliver a turnaround.

Fundamental problems remain unsolved. ITV1 is still weak in the late afternoon, where its children's programming underperforms, and again from around 8.30pm. Instead of drama of the quality of Inspector Morse, there is not very popular nonsense such as Bad Lads Army. Meanwhile in the battle for younger viewers, Big Brother is unaffected by Love Island, the show that prompts the question: can society dumb down any further?

Yet the notion that Mr. Allen has sat back and done nothing since the Carlton-Granada merger is nonsense. Since ITV plc was created, he has tucked in the merger, launched four new channels and secured a big cut in the cost of license fee payments. The chief executive has tried to buy a way into the internet, with the optimistic purchase of Friends Reunited, and ordered a total revamp of its commissioning and scheduling, led by Simon Shaps.

Even the share price, limping below the loop level, is not as bad as critics would have us believe. Yes, the shares are down 13 per cent on the year, not pretty, but the broadcaster has done better this year than every other advertiser-funded company – ranging from E-map to Daily Mail and General Trust.

Unfortunately, though, Mr. Allen's activity has not delivered enough. ITV's new channels are not stemming the painful loss of viewers on ITVI, while the core channel's much-hyped revamp hasn't yet had the opportunity to deliver. Mr. Allen can say what he likes about the inevitability of viewer fragmentation caused by digital, but ITVI continues to lose share faster than any terrestrial channel besides Five. ITVI is down 8 per cent this year, BBC One is down only 6 per cent.

Mind you, life at the BBC is a doddle by comparison. Okay, so Mark Thompson has to get a new charter and license fee once a decade, but otherwise he knows where his money is coming from. The ITV boss has to deal with the fact that his company is dependent on the performance of just one channel, at a time when that channel is under pressure.

ITV's corporate structure has long made it the most vulnerable of all Britain's broadcasters. Look around the world, and there are few independent, private networks; most television broadcasters are part of media conglomerates controlled by people such as Sumner Redstone or Silvio Berlusconi. ITV, meanwhile, stands alone now, although for most of the past 15 years the third channel was consumed by distracting battles between franchisees.

At the same time, the strategic challenges faced are immense. ITV desperately needs to reduce its dependence on TV advertising – easy to say, but no simple task. But making money out of pay television is difficult in the current climate (unless ITV is sold to NTL). So, the future more probably lies in bolder attempts to harness internet revenues why – not start aggressively cross-promoting Friends Reunited as a start? – selling decent drama to the Americans, and getting into radio and other media, too.

Nor is it clear that Mr. Allen has been well served by his chairman, Sir Peter Burt. Apparently Sir Peter was an excellent banker, but he has been a disappointment at ITV. While the BBC has, for the first time, a chairman with experience of broadcasting, ITV has a chairman who quite clearly has not a due about the nature of the business. Sir Peter is unfocused and halting in public: privately boardroom critics complain that he has not set his chief executive dear enough targets so that he can be judged. Yet, that said, he is not the man who runs the company.

The problem for Mr. Allen is that, for shareholders, his presence has become a byword for underperformance. If ITV wants to retain its independence, and avoid another cheeky venture capital bid, it is going to have to plead for more time to deliver on the current strategy. Mr. Allen is smart enough to realise this, which is why it must be tempting to signal an end to his reign, perhaps while he is still powerful enough to engineer his succession.

The Times, Friday July 28, 2006