Next on ITV: survival

DAVID Liddiment, ITV's director of channels, infuriated the BBC and scored a peer-group hit with his MacTaggart lecture at the Edinburgh TV Festival last weekend. He warned that British television, locked in an endless quest for profit and performance, was in danger of losing its soul.

Liddiment accused archrival BBC1 of abandoning public service in the quest for big audiences. But his lecture sidestepped many tough questions threatening to engulf ITV itself. Unless its fortunes are reversed in the coming months, ITV could lose something far more valuable than its "soul".

The difficulties with Saturday's new football-highlights show, thrashed last weekend for the second time by a celebrity edition of The Weakest Link on BBC1, are just the most recent threat to ITV's position as Britain's mostwatched channel. At stake are hard-won ratings and advertising revenue worth millions of pounds, as ITV struggles in the toughest advertising recession to hit the network since it began broadcasting in 1955.

The network's problems with ITV Digital, the relaunched pay-TV service ( originally OnDigital) backed by Granada and Carlton, are exacerbating the revenue concern. It has already cost 800 million, and may force chief executives to look hard at programme budgets. Yet if programme spend is reduced, quality invariably suffers - and ratings could drop further. With the BBC spending a sizeable chunk of its increased income of 1.1 billion on drama and entertainment, the majority directed towards BBC1, now is not the time for ITV chiefs to skimp on drama.

In fact, ITV drama controller Nick Elliott has ordered writers to beef up storylines or some old warhorses could be axed.

AD rates are around 30 per cent lower than a year ago: in July, it was reported that a break in Coronation Street cost 70,000 compared with 90,000 a year earlier. As for audience, so far this year ITV has taken a 27.9 per cent share - compared with 29.7 in 2000. Network bosses maintain the drop in revenue is cyclical. But what if it proves structural, with advertisers diverting money to more youth- friendly Channels 4 and 5, and specialist services like pay-network UK Style?

As the number-one station, ITV has a great deal to lose. In the past 10 years its audience share has shrunk from 43 per cent to well below 30 per cent.

This statistic reveals the inroads made by satellite and cable, whose growth has hit ITV hardest out of all five terrestrial stations.

That ITV is still to complete a deal with Sky Digital is compounding this problem. ITV Sport, belatedly launched last month, would, say analysts, stand a real chance of success if Sky subscribers could watch it. Historically, ITV has been disproportionately popular with older viewers, a problem Liddiment has helped to address with more targeted shows like Cold Feet. For its autumn series, Cold Feet moves from Sunday to Monday evenings, where there is the chance of higher audiences - and greater revenue.

Within ITV, the concern is that The Premiership will become even more of an embarrassment than Survivor, the much-hyped reality show eclipsed this summer by Channel 4's Big Brother after failing to achieve big ratings.

Critics have hailed ITV's autumn schedule, which begins in earnest next week, as being more innovative than BBC1's. Highlights include a new animated satire, 2DTV, ridiculing celebrities and politicians; The Sketch Show, created by Steve Coogan; versions of Othello, HE Bates's My Uncle Silas, starring Albert Finney, and the Dickens- inspired Micawber, reuniting David Jason with Only Fools and Horses' writer John Sullivan. Certainly ITV is fighting hard to regain lost ground. But history and economics may be against it.

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