Cliche dictates that Michael Grade be described as 'flamboyant'. There are the red socks, the family connections - his late uncle Lew Grade is invariably described as a 'showbusiness impresario' - and his erstwhile fondness for cigars. Then there's the famous programming decisions, such as the axing of Doctor Who in the 80s and the introduction of Roland Rat. It all gives the impression of a TV luvvie par excellence.
It also does Grade a disservice. Behind the hype lies a sharp, unflappable businessman. In the eight months since he abandoned the BBC for ITV, it has undergone a root-and-branch strategy review, culminating in his presentation of a five-year recovery plan to the City earlier this month. The targets are bold, but what is most interesting is that the plan is content-led and based on self-help rather than cost-cutting and lobbying for regulatory change - a marked change from the presentations given by his predecessor, Charles Allen.
Unlike Allen, Grade displays a genuine passion for TV along with an eye for what the public wants to watch and advertisers want to buy. He is popular among staff, and his plans make it clear he believes there is a future for the 52-year-old broadcaster. After ITV's strong summer, he has won the benefit of the doubt. But as he admits, there is still plenty of work ahead.
Q: Why did you join ITV?
A: My whole career has been based around joining companies as they plateaued. All my jobs have been about getting established businesses up when they were about to go into decline. Obviously there's a huge emotional hook to ITV - there's a family connection and I learnt my craft at LWT. And to be absolutely blunt, it was driving me crazy watching the business struggle.
Q: What did the ITV brand mean when you took the job?
A: Much like Marks & Spencer, ITV had a big place in the public's affections, but it kept on disappointing. When M&S struggled, people would go in and there would be nothing to buy, but they kept going in hope. That was where ITV was going.
Q: What would you like it to be when you leave?
A: The first and biggest source of entertainment for the British public. That's what we've built our reputation on. ITV will be where you come for free, best-value British content.
Q: How does your approach differ from Charles Allen's?
A: I could never have done what Charles did in terms of painstakingly negotiating the merger with all the stakeholders, the politicians and regulators. He was the master of that. But there comes a point where you need to grow the business. We've done the cuts and got some, but not all, of the regulatory concessions; now we need to grow the top line. We'll do this through content, and that's where I come in. I don't think he could do what I could do and I couldn't do what he could. So he was the right man for his time, and I hope I'm the right man for my time.
Q: Was the Contract Rights Renewal system a price worth paying for the merger?
A: It was a reasonable expectation at the time that the remedy would be reviewed after three years. What wasn't factored in was the pitiful performance of ITV on-screen and the very soft ad market - the two together formed a perfect storm, with hundreds of millions of pounds disappearing from ITV. It's a pointless exercise asking 'should we have done this, should we have done that' - we did it and we're in it. All my energy and thinking time is spent on how we can get a result that advertisers are comfortable with and confident in and that will enable us to do what we have to do, which is to innovate and maintain our present level of investment.
Q: What form would you like a 'son of CRR' to take?
A: Obviously we are working on different models, which we will put in the public domain when they are ready. But advertisers have long memories. They won't forget the old bad habits of ITV - arrogance, rampant inflation - and that's understandable. Nobody was going to support the abolition of CRR, so let's find a mechanism that gives advertisers comfort that we won't misbehave. At the same time a more sophisticated formula will allow us to be rewarded for delivering value for advertisers, which currently we're not.
Q: Are there any concessions you are prepared to make to advertisers for them to support a change to CRR?
A: It's not down to me - everybody will put their evidence in. We'll put our suggestions and arguments to the Office of Fair Trading. I'm sure ISBA and individual advertisers will too. It's down to the OFT and the Competition Commission to work their way through it. I very much doubt there will be consensus. I think it helps our argument that advertiser confidence in ITV has returned. We have to go on earning that through our performance next year, but I do feel a sense of confidence returning from conversations I have had with the chief executives of big advertisers. They have told me they like what I'm doing.
Q: Do you think advertisers were neglected in the past?
A: No, I think our product wasn't right. We were distracted by the merger.
Q: Will a change to CRR mean ITV can charge ITV1 prices for its other channels?
A: The market decides the price. It's a market now - it wasn't years ago because we pretty much had a monopoly, but that's no longer the case. Advertisers have plenty of choice, and they exercise that. We can't fix the price, as they don't have to pay it.
Q: Your target is a 38.5% share of commercial impacts by 2012 - that's a pretty dominant position, isn't it?
A: But that's not the market - the market now is Google and everybody else. Google is now bigger than Channel 4. Every advertiser is looking at the web to see what that will give them, and that diminishes our pricing power. Our pricing power has diminished dramatically over the past five years because there is so much more choice for advertisers.
Q: Do you think that the regulation of advertising has gone too far?
A: I think we are in a dangerous period where politicians, in the face of intractable problems and the general media clamour to be seen to be doing something, have taken a free hit at the advertising sector to give the impression that they have done something. That is disingenuous, and we, as an industry, have to argue against it. Advertisers are the major employers in the economy; they create wealth. It's one thing if there is evidence that it will work, but just taking a political swipe at advertising because politicians feel powerless to do anything else treats the audience with contempt and utterly misunderstands the purpose of advertising. It has to stop.
Q: Are you worried about further restrictions?
A: Very. The industry - us included - has been hopeless at making its case. We have to get our act together. I've been thinking a lot about what contribution I can make to stop this rather disingenuous approach. There is now a queue of special-interest groups wanting to flex their muscles and attack the ad industry, especially alcohol ads. It's as if before television there was no drinking. The notion that by curtailing advertising you'll stop people drinking is preposterous and intellectually bankrupt.
Q: What is ITV's online strategy?
A: We like the free advertiser-supported model. We think that we are a trusted media owner and can drive massive traffic to ITV.com through cross-promotion, our programme brands, rich content, catch-up and archive. We think we can offer advertisers a really clear-cut, simple-to-buy, simple-to-transact ad proposition on the web, and that's what we aim to do. Getting our act together on the web will be the catalyst for growth in that sector. I want ITV to drive it.
Q: Why are you concentrating on returning drama to the ITV1 schedule?
A: 9pm is crucial. It is when most people who advertisers value the most - light viewers, ABC1s and 16-34s - are viewing, and, frankly, our offerings have not been good enough. People have been watching Life on Mars, New Tricks, Hustle; ITV midweek has been a bit thin.
Q: Has ITV been reliant on too few formats?
A: We've done too many shows that are poor clones of other people's ideas. We've stayed with shows too long that are past their sell-by date and that have been risk-averse. Innovation is the life-blood of our business, and there has not been nearly enough on ITV.
Q: Will you start doing fewer reality and celebrity-fronted programmes?
A: It depends on the idea. If the idea is good enough, original enough and 'ITV' enough, we'll do it. I remember somebody in Hollywood who was running CBS announced that the age of the sitcom was dead - two years later there was Friends. Every idea will be judged on its merit; what we don't want is copies of other people's shows unless there's a real twist that makes it better, such as Dancing on Ice, which wouldn't have happened without Strictly Come Dancing.
Q: Do you think other broadcasters are trying to take on ITV at its own game?
A: I hope so. Competition for ad revenue is good for the consumer and it's healthy. We must have confidence in our own abilities and stop worrying about what everybody else is doing. I don't give a toss what anybody else is doing, I worry about what we are doing. I want them to worry about us for a change.
Q: You have said you will leave ITV by 2010. How will you judge whether you've been successful?
A: I won't judge me. The City will judge me and the viewers will judge me.
Q: Will you resign if you don't meet your targets?
A: I don't countenance the prospect of not getting this business growing. Failure is not in my vocabulary.
ESSENTIALS - ITV STRATEGY
- The key targets in Grade's five-year recovery plan are: annual revenue growth of 3%-5% to 2010, then 5% to 2012; to double revenue from content to 拢1.2bn; to gain a 38.5% share of commercial impacts; and to triple online revenue, including from Friends Reunited, to 拢150m.
- The goal is to achieve this recovery through high-profile content capable of delivering mass audiences across multiple platforms.
- To help pay for it, Grade plans to slash ITV's regional programming budget by 拢120m. However, online service ITV Local will be boosted as the broadcaster targets the online classified market.
- ITV will pour an extra 拢20m into the programming budget for ITV2, which the network believes can overtake Five among the 16-34 demographic.
- For more on Michael Grade and ITV's future strategy, go to www.brandrepublic.com/michaelgrade.