Call TV leaves ITV’s ears ringing

The UK’s ITV has been hit hard by the recent spate of call TV scandals, facing a £2.8m (US$5.7m) fine at its morning television franchisee GMTV and closing down its late-night strand ITV Play.

GMTV, in which ITV holds a 75% stake and Disney 25%, is likely to be hit with the record fine from media regulator Ofcom for deceiving viewers over a four-year period.

Paul Corey resigned as GMTV’s MD earlier this year over the scandal after the BBC’s Panorama alleged viewers had been cheated out of as much as £40m by entering phone-in quizzes they had no chance of winning.

Ofcom has made no secret of the seriousness with which it regards such compliance failures and has come down hard on other broadcasters.

Earlier this year it handed out a record £300,000 fine to Five for misleading viewers during its Brainteaser quizshow and the first ever fine, of £50,000, to the BBC for faking the winner of a phone-in quiz on kids show Blue Peter.

The expected £2.8m penalty on GMTV will set a new high, however. It comes as ITV prepares to wind down its own late-night call TV strand ITV Play, which at one point was one of the fastest growing parts of the business.

“ITV Play’s call TV programming will be phased out by the end of this year as negative publicity following compliance problems across the sector has seen call volumes drop to uneconomic levels,” the company said in a statement.

ITV Play accounted for £56m of the revenues at ITV’s consumer division last year, which had a total turnover of £126m. At the interim stage this year, however, ITV Play revenues were down 67% to £9m.

Yesterday, as part of a root-and-branch review of the company’s strategy, ITV executive chairman Michael Grade said ITV Play was simply no longer a growth business for the company and hence the decision had been taken to close it down and focus on other areas.

ITV plans to close down a number of its regional news operations to free up the funds to invest in increased in-house TV production. The company plans to cut the amount of programming it commissions out to third parties and is also planning to spend £200m on acquiring production companies.

The broadcaster is also planning to step up investment in material for the web and said it was close to striking deals with the likes of YouTube and MySpace to extend its distribution. ITV hopes its online revenues will rise to £150m in 2010.