ITV Suspends Live SMS, iTV Participation; Brings In-House; Takes An £18 Million Hit

ITV (LSE: ITV) has immediately suspended viewers’ SMS and red-button interactive-TV participation in its live programmes after a Deloitte review (pdf) in to its premium-rate activities found “serious editorial issues” in three shows. Deloitte this morning said procedures, controls and relationships between producers and vendors were inconsistent, while “supporting technology, in the most part supplied by third party suppliers, lacks the reliability and resilience consistently to deliver the required level of service“.

Executive chairman Michael Grade in a regulatory statement: “Only when the network and platform operators can reassure ITV that appropriate systems are in place to ensure delivery of votes in a timely fashion, will ITV reconsider (the suspension).” Indeed, he said ITV is bringing all telephony provision in-house for productions made by the network itself, and is working with BT (NYSE: BT) to develop a solution that will allow it to manage all interactive services itself, reducing reliance on third-party suppliers in a move that is likely to see some of their contracts dry up. After Ofcom warned broadcasters, rather than vendors, to take responsibility, it’s a logical step.

He announced call charges totaling £7.8 million, paid by viewers for uncounted votes or competition entries, will be reimbursed or donated to charity, ” but I don’t intend to take a couple of token scalps”. The problems were found in Soapstar Superstar (2007), Ant and Dec’s Saturday Night Takeaway (2005 and 2006), and Ant and Dec’s Gameshow Marathon (2005). Grade admitted: “It was not understood that when the audience is invited to make choices within programmes, the producer is effectively ceding part of his/her sovereignty over editorial decisions.” ITV will now incur an £18 million exceptional charge in full-year earnings.

Edward Boddington, CEO of Harvest Media Group, which powers the voting for ITV’s X-Factor, Pop Idol and others, and whom we interviewed last week, today told paidContent:UK this “will result in the bar being raised and the industry will relaunch stronger“: “Participation will remain as popular as ever, but there has to be collective responsibility with all parties working together to ensure not only compliance but a positive viewer experience.”