Greg Dyke on Broadcasting

This could be the beginning of the end for ITV's dominance

So is ITV really in serious trouble or are the channel's current problems with ratings just part of the inevitable cycle of ups and downs that happens in the television business?

So is ITV really in serious trouble or are the channel's current problems with ratings just part of the inevitable cycle of ups and downs that happens in the television business?

First the channel dropped two of its new peak-time reality TV series, The Real Good Life and Fat Families, after just two episodes. Then there was the news that the first week of June saw ITV's second worst ratings performance ever with just 19 per cent of total viewing, below the crucial 20 per cent barrier.

With more and more homes receiving multi-channel television all the traditional channels will be prone to good and bad patches for ratings. The real problem for ITV would come not because of the performance in a particular week, but if that performance is repeated week after week across the summer. If that happens there are people who believe that ITV is in danger of hitting a point when its decline in viewing among certain groups - particularly the young and the ABC1s - is such that for those groups ITV will no longer be viewed as a major player at all and will be regarded as just another channel.

One man who certainly believes this could happen is John Fairley, the former director of programmes at Yorkshire Television. Although it's nearly a decade since he left ITV, John is probably still responsible for more successful programmes on ITV today than any other single individual. He was the person in charge at Yorkshire when ITV bankers such as Heartbeat and A Touch of Frost first hit the screens as well as other massively successful dramas such as Darling Buds of May. He was also responsible for increasing the ratings for Emmerdale by crashing a plane into the original farmhouse. The stunt led to a long-term increase in Emmerdale's performance because it persuaded people who used to watch the programme but had given up to take another look.

Fairley is one who believes that ITV1 is very close to a "tipping point" and that if the channel gets less than a 20 per cent share week after week serious questions will be asked about its future. By launching and heavily cross-promoting three ITV digital channels, ITV management has, to an extent, created its own problem by undermining its own main channel. Here I have some sympathy, as what choice did they have? The multi-channel world is here and arguably ITV had little option but to get into it even though they were likely to bastardise ITV1 in the process.

The problem of declining ratings on all the terrestrial channels is not a new one, but ITV's decline has been by far the fastest of all. In the longer term ITV's decline is likely to stop around 2012 by which time every home in the country will be multi-channel. The question is: what will ITV's share be by then? Current guesses are between 18 and 20 per cent across the year.

What is particularly difficult for ITV at the moment is that ratings are probably more important than they've ever been because of the assurances ITV management gave to the advertisers when Granada and Carlton were allowed to merge. Selling advertising has always been a black art understood by very few, but, as part of the merger, ITV agreed to something called CRR which means that if its ratings fall so does the share of money the agencies have to spend with ITV the following year. Last year ITV had a bad time for ratings so its advertising is suffering this year, but everyone in ITV hoped for a better performance this year. So far the signs are not good; in fact, things are getting worse. ITV's year-on-year ratings decline among the most valuable demographic group, the 16- to 35-year-olds, is spectacular.

So how does the channel stop the decline? Again John Fairley believes they've got to do what he did with the plane crash in Emmerdale - create events across the schedule which can be heavily promoted so that there's more must-see programming.

It is interesting that ITV's new head of sport, Mark Sharman, is trying to do exactly this by following the same route ITV took back in the late 1980s when their schedule was in big trouble - they used boxing to rebuild the ratings. Then Nigel Benn and Chris Eubank were turned into big stars on ITV and as a result Saturday and Sunday night boxing became a massive audience puller. Maybe Ricky Hatton could become a household name despite all those years on Sky when few had heard of him or knew what he looked like.

Let the bidding games begin

When television companies are bidding for football rights, all sorts of games go on. It is not unknown for one company to bid not because its wants the rights but because it wants the others to pay more. That way its competitors have got less money in the sports budget for the rights they really want. This has been happening in recent months over the rights to televise the Champions' League matches from 2006 onwards.

The signs are that it will be "no change" when an announcement is made, probably later this week, over who has won the rights to the televise Champions' League for another three years, with ITV keeping Tuesday nights and Sky keeping Wednesdays. Both will have the right to show the final which, if this year's viewing figures are anything to go by, means most people will watch it on ITV.

Both broadcasters are likely to pay roughly what they paid last time - £40m plus each season - even though there wasn't much competition. But the usual games went on during the bidding, with Five attempting to steal Wednesdays from Sky and the BBC pretending to be bidding even though it had already spent its sports budget.

No doubt the whole game starts again next year for the Premier League contract.