Can Grade make the grade

Hi, Ncapitalism is back after a "dissertation leave"!

Today there have been a lot of media reports(Guardian, FT) on Michael Grade's ambitious plan to "double the ITV income by 2012". As reported, Grade wants to cut regional programming from 17 to nine, and wants to increase in-house production, among others.

Can Grade make the grade?

The regional programming cut would be very controversial and very uncertain. There is a danger of union strike in protest, since hundreds of jobs would be lost as a result of the cut. More importantly, it is still uncertain whether Ofcom would give go-ahead to the cut.

It looks like a paradox for ITV, a commercial public service broadcaster (PSB). They have enjoyed great benefits of being PSB, like very cheap spectrum and visibility at the EPG, among others. But on the other hand, the commercial broadcasters feel the PSB remit is restraining their ability to generate more advertising revenue.

However, the paradox is not an issue. ITV unnecessarily will need to cut back on their regional programming to revigorate their business. It reminds me of the book "Doing what matters", written by James Kilts et al. When Kilts took over at the Gillette, the business got many problems, like decline of market share, flat sales and earning, acquisitions not deliversing, among others. Kilts could easily go for the divesting of some acquired business, instead he chose not to divest but focus on three strategies: ZOG, FE and TI.

ZOG means zero overhead growth,aiming to control costs and invest the savings in research and marketing. FE is functional excellence, meaning achieving best-in-class capability and performance at the best possible cost. TI stands for Total Innovation, meaning that continous innovation to come up with game-changing products.

The strategy had revived Gillette, without making any divestment, and it is quite instructive for the ITV. Could ITV control the cost through other ways except the cut on regional programming? Has they achieved the best quality programming with the least cost? Has they been continously working to deliver new game-changing products?

So these are what really matters. It makes no sense to focus on the psb remit, which the ITV has really benefited a lot from.