How ITV rejuvenated its core
I was interested to read an article about the rejuvenation of ITV* recently in the Times, led by CEO Adam Crozier. It shows how the core principles of growing the core can be applied not only to consumer goods brands, but also to complex service businesses.[* For non-UK readers, ITV is the biggest "terrestrial" commercial TV station in the UK. For many years it was one of only 3 main TV stations, alongside BBC1 and BBC 2]
When Adam joined ITV in 2010 the business was in a mess. It had botched a first entry into digital TV, struggled to get to grips with online competitors and run down its production business. Plummetting advertising revenue pushed the broadcaster into the red, and the share price dropped to a low of 17p.
Fast forward four years, and ITV recently announced total revenue up 9% to £2,389m, and EBITA up 21% to £620m. Importantly growth has been consistent, with four years of 10%+ increases in profit. This is an impressive performance given the threat of digital media to ITV's core business.
1. Define the core
An important first step in ITV's revival was to define what business they were in, by re-focusing on content creation. The vision was defined as: "To create world class content which we can make famous on our channels, before exploiting its value across multiple platforms, in the UK and internationally."
2. Upgrade the core
Having put content at the heart of the business transformation, the company then set about rebuilding the ITV Studios production division. The division was so depleted when Crozier joined that investors urged him to abandon production entirely. Instead, he revived the business in two ways. First, new shows were created in-house. Second, it bought small, independent producers such as So TV, which makes The Graham Norton Show.
The studio business has delivered a double whammy for ITV. It is an important business in its own right, with revenues up 50% in the past four years to £857 million. Second, the stream of new programs, such as the drama Broadchurch and reality TV hit I'm a Celebrity, Get me out of Here, has helped ITV achieve its best audience share in 10 years, with the ITV main channel up 3%.
3. Distribute in new channels
ITV has opened up new channels in two main ways. First, it has sold programs to international markets, especially the US. For example, Mr Selfridge has been sold to 150 countries. Second, the company has grown its presence in online and interactive broadcasting, including ITV Player.
4. "Walk and chew gum"
This is a phrase from my first General Manager at P&G. The point is that that you have multiple challenges to work on at the same time. In ITV's case this was to drive up revenue AND cut costs. The easy route would have been to slash costs and shrink the business. Instead, Crozier led a strategy to grow revenue as described above, whilst cutting costs in non-core activities, with £23million of savings in 2013 alone.
5. Distinctive identity
ITV has done a nice job of revamping its brand identity to make it more distinctive. This now feels more friendly, popular and warm, in line with its position as a mainstream broadcaster with a wide audience. More importantly, this identity is now more coherent across the different and expanding range of channels and businesses. This consistent branding makes it easier to create some memory structure. If you are intrested, there's a great story of how the design was created here.
Its also smart how the "anchor product" was re-named from ITV1 to just ITV, to be the same as the masterbrand. The brand is the anchor channel is the brand.
The new logo by itself would not have made much difference. But combined with the business transformation it works well as a symbol of change and the "new" ITV.
In conclusion, hats off to Adam Crozier and the team at ITV for rejuvenating the core brand and business in a very tough environment. Best of all, the new ITV ad below suggests that Simon Cowell is coming back as a judge on the next series of The X-Factor, a Saturday night fave in the Taylor household 🙂