ITV to Post One-Time £18-Million Charge on Phone-In Scandal Costs

LONDON, October 18: ITV’s
financial results for this year will include a £18-million charge related to
costs incurred from the call-in scandal that besieged the British commercial
broadcaster this year.

ITV revealed details of
the charge following the publication of the Deloitte review of its premium-rate
services, which were suspended March 5 after irregularities came to light. ITV
commissioned the Deloitte review, which found editorial problems in three
shows: Soapstar Superstar 2007,
Ant and Dec’s Saturday Night Takeaway in 2005 and 2006; and Ant and Dec’s Gameshow Marathon 2005. The Deloitte review also highlighted technical
issues around the use of red button for voting and the late arrival of SMS text
votes on five occasions affecting two ITV shows, including the X Factor final in 2005. These glitches, however, did not
affect the actual outcome of those votes.

The report maintains that
producers, staff and supporting companies did not always recognize or respect
the impact of editorial actions on the integrity of interactive elements.
Furthermore, there was a lack of agreed and consistently applied procedures,
and supporting technology, in the most part supplied by third party suppliers,
lacked reliability.

ITV has said it will
reimburse affected consumers and any unclaimed amounts will be donated to
charity. The total potential reimbursement is around £7.8 million, which
represents the amount spent by affected consumers and is almost double the
amount ITV actually received from these calls.

Beyond reimbursements, all
SMS and red button voting in live programs will remain suspended. ITV will
continue to offer those services for non-time critical competitions and other
interactivity. Telephony service provision will be brought in-house on programs
made by ITV Productions, with an intention to extend that across all programs
broadcast on ITV. ITV is working with BT to develop a solution to manage
interactive service provision in house. Plus, training will be implemented
across the company to ensure that employees are aware of their responsibilities
in respect of the operation of interactive services and its integration into
program making.

ITV’s executive chairman,
Michael Grade, said in announcing the review’s findings: “Today marks a major
milestone in our efforts to restore public trust and put our house in order
after a series of events that have affected not just us, but the entire
broadcasting industry.”

He continued: “My overall
conclusion from the review is that there was a serious cultural failure within
ITV.… 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. It was not understood that when the
audience is invited to make choices within programs, the producer is
effectively ceding part of his/her sovereignty over editorial decisions. These
failings were not venal. 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. This cultural conflict was compounded by several other factors including:
the speed of development of PRS activities; the complexity of the technological
factors; the sheer volume of calls; and an extended chain of operational
command that existing compliance procedures failed to keep up with.”

Grade went on to say: “The
effective solution is to change the culture, to change the systems, to
understand the importance of trust. I am absolutely sure that there isn’t a
person working in or for the company who doesn’t understand now where and why
it went wrong. And everyone also knows that a line has been drawn, and that
there will be no excuses for ignoring it—the consequences will be
severe.”

—By Mansha Daswani