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In 2007 we announced our five year strategy to take us to full digital switchover in 012. It is a strategy which will position ITV to take full advantage of the developments shaping our industry, across Broadcasting, Global Content and Online.

Our vision is for ITV to be the UK’s favourite source of free entertainment, building on our heritage of providing high-quality, ad-funded UK programming. ITV will return to growth,with an over-arching target for the business as a whole to deliver compound annual revenue growth of 3%–5% to 2010 rising to 5%to 2012. With increased revenues feeding through to our earnings, we will aim to return dividend cover to 2 times to 2.5 times in the medium term and to retain our investment grade rating. The strategy is based on self-help, not regulatory assistance. It is self funding, with any new investment paid for out of efficiency gains, regional savings and the proceeds of continuing disposals. Following investment for growth in 2008, the benefits of which should start to be reaped in 2009 earnings, the full growth plan will be in action in 2010. Each of our major business segments has clear targets and an action plan for growth.

Broadcasting

For Broadcasting, our key objective is to remain the country’s leading commercial channel provider so that, in 2012, we plan to be delivering at least a 38.5% share of commercial impacts across our channels. We will stabilise ITV1’s performance and build on the success of ITV2, seeking to turn it into the UK’s third largest commercial channel for 16–34 year olds.

The following initiatives will assist us in delivering these targets:

  • The launch of a new ITV1 peak time schedule. In early 2008, ITV1 underwent its most significant transformation in a decade, in terms of schedule structure and new programming across the full range of genres;
  • Keep programme costs in check. ITV has relaunched its schedule whilst working within an ongoing commitment to ensure the programme budget does not increase in real terms;
  • Invest in ITV2 to become the third largest commercial channel for 16–34s. ITV2 is already the UK’s number one digital channel.
  • Win a greater share of marketing budgets. We will be a market leader in offering advertisers more opportunities to fund content, via ad-funded programming and product placement;
  • Future-proof Freeview and launch Freesat. We will build on the success of Freeview with our partners and launch Freesat, working with the BBC to strengthen free-to-air digital television;
  • Launch an ITV HD service in 2008. We are seeking to bring HD to Freeview over time and will launch an ITV HD service on Freesat;
  • Secure a new ITV1 PSB remit for the digital age. ITV’s PSB obligations cost over £200 million in 2007. In the short term, we aim to save £40 million through a reorganisation of regional news;
  • Work to replace CRR. We will work closely with advertisers and the wider industry as the regulatory review process unfolds.

Global Content

The key objective within our Global Content division is to create and own the UK’s most popular and valuable content, doubling our annual revenues in the UK and internationally by 2012 to £1.2 billion. This target includes ITV commissions – where we aim to increase ITV Productions’ share – but also commissions from other UK and international broadcasters, which we intend to expand significantly.

Key actions to help us meet these challenging targets are:

  • The creation of an integrated Global Content division, bringing together our international production, sales and licensing businesses with our UK production business;
  • An increased focus on high-value genres with 360 degree potential. We will accelerate development and production of long running drama series, factual and entertainment formats
  • and comedy;
  • Development spend increased by 50%, targeting the high value areas of drama, formats, quiz shows and features;
  • Launch a new talent strategy to make ITV a magnet for creative talent. We are offering people a wide range of new and exciting ways to work with ITV;
  • Continued expansion of global sales and production by better exploiting programming from our UK and international production arms, and via targeted international acquisitions;
  • Targeted acquisition of complementary UK and international producers. We have allocated up to £200 million for UK and international acquisitions. For example, game show producer
  • 12 Yard was acquired in December 2007.

Online

In Online our primary target is to deliver £150million in annual revenues by 2010. This will come from a combination of advertising subscription and transactional revenues across a number of properties, including itv.com, relaunched in 2007, and our proposed broadband archive service working with BBC Worldwide and Channel 4. By 2010, we aim to grow itv.com into a top 10 UK commercial entertainment site.

Our key actions to achieve these targets are:

  • Grow viewing of ITV on-demand content. The new itv.com site was relaunched in 2007 and traffic is up significantly since relaunch. We will also selectively syndicate our content to
  • generate ad revenues, earn licence fees and drive awareness of ITV programming and of itv.com in particular;
  • Develop specialist sites around key programme brands and communities, using these brands to open up a range of online and interactive revenue opportunities;
  • Build our local community site, itvlocal.com and grow Friends Reunited as part of our portfolio, with a greater emphasis on advertising;
  • Build excellence in online ad sales. With itv.com offering streamed channels, 30 day catch up and exclusive content, we are well placed to secure a substantial share of this fast
  • growing market;
  • Develop adjacent online businesses attractive to our audience and advertisers.

For more information please go to our Strategy update page