British broadcaster ITV faces a bill of £18 million for the phone-in problems that have severely damaged its brand. That is before a possible fine and even a police investigation. The company has suspended text and interactive television voting and is offering refunds to viewers whose premium rate calls to vote and enter prize competitions were not counted. Senior executives are still holding on to their posts, but some positions seem increasingly untenable.
ITV published the findings of a review of its use of PRS or premium rate services on the day that the BBC announced plans to save money through redundancies and selling off buildings. This has led to suggestions that it was a good day to bury bad news, an idea refuted by ITV, although they have had the results of the report available for some time.
The accountants reviewed more than sixty series and identified serious editorial and technical issues on a number of occasions, affecting several series of prime time Saturday night programmes.
Although the report itself has not yet been published, it appears that programme producers did not always take viewer votes into account, either because of technical issues that meant not all premium rate phone calls were counted in time, or because they simply imposed their own editorial decisions.
Deloitte concluded that programme producers, staff and supporting companies “did not always recognise or respect the impact of editorial actions on the integrity of interactive elements”. There was a “lack of agreed and consistently applied procedures, controls and ways of working between the many parties involved in the process” and supporting technology, mainly provided by third-party suppliers, was “lacking the reliability and resilience consistently to deliver the required level of service”.
Executive chairman Michael Grade said the Deloitte report made for “deeply uncomfortable reading”. He said the “fundamental failure was in not recognising the impact of PRS on existing editorial processes.”
“While the Company saw interactivity as attractive to viewers and PRS revenues as valuable additional revenue, it missed the fact that with it came obligations as well as opportunities,” he continued. “It was not understood that when the audience is invited to make choices within programmes, the producer is effectively ceding part of his or her sovereignty over editorial decisions.”
“In all cases individuals were motivated by their professional instinct to produce the best show, but they failed to understand that this could come at the expense of keeping faith with participating viewers.”
The chief executive, who has said he has a “zero tolerance” position on such matters, said he did not intend “to take a couple of token scalps in expiation”. However, he added that there would be no excuses in the future and that “the consequences will be severe”.
So far there have been no resignations from the senior executives ultimately responsible for the premium rate revenues, some of whom are understood to have received annual bonuses directly related to the profitability of such services.
Paul Corley, the managing director of GMTV, in which ITV is the main shareholder, resigned in July, as did the head of competitions. The breakfast broadcaster subsequently received a £2 million fine from Ofcom for the “widespread and systematic deception of millions of viewers”. The company still faces the possibility of a criminal investigation by the Serious Fraud Office.
Ofcom has yet to rule on the phone-in problems associated with programmes on ITV, with the prospect of a further significant fine if it is found in breach of broadcasting codes. The broadcaster could still face criminal charges.
Some are surprised that the issue has not prompted any dismissals or resignations. “I think this is fraud,” said John Whittingdale MP, the chairman of the Commons Media select committee. “At the least, I would expect Ofcom to levy a fine reflecting the gravity of the offence. Most people would expect someone senior to lose their job.”
ITV has offered to reimburse the cost of the calls involved, estimated to be about £7.8 million, and to donate to charity any unclaimed amount.
In the mean time, ITV has announced the immediate suspension of all text and red button voting in live programmes, although it will continue to use them for non time-critical competitions and other interactivity. The broadcaster says it will only reconsider the position when the network and platform operators can provide appropriate systems to ensure the delivery of votes in a timely fashion.
ITV is planning to bring telephony service provision in-house of programmes made by its own production company, with the aim to extend this to all the programmes it broadcasts. It is working with BT to develop a solution to manage interactive service provision in house, reducing its dependency of third-party providers.
The broadcaster is also introducing training programmes to ensure that “employees are aware of their responsibilities in respect of the operation of interactive services and its integration into programme making.” Its compliance processes will be strengthened by the addition of a dedicated Interactive Governance team.
Under executive chairman Michael Grade, who joined ITV from the BBC, the commercial broadcast has acted quickly to address the lack of control around premium rate participation programming. The damage to its reputation is probably significantly more than the direct cost to its bottom line. It is difficult to see how those directly responsible over the period will hold on to their jobs, but the commitment to put proper processes and infrastructure in place is an essential step to restoring viewer confidence in votes and competitions.
Details of the programmes involved are published on the ITV web site at www.itv.com/competitions. Affected viewers can register a claim for the cost of relevant calls online or by calling freephone number 0800 028 0180.