ITV merges online & video operations

ITV insists that the decision to move its online business into its programming operations is 'absolutely not a cost-cutting measure', despite a slump in ad revenues forcing significant restructuring at the broadcaster.

The changes will 'fully integrate' all ITV's online assets - which include video streaming,, ITV Local, project Kangaroo and Friends Reunited, as well as interactive and gaming - with its family of broadcast channels.

Michael Grade, executive chairman of ITV, said: 'With content at the heart of our turnaround strategy, it now makes sense to integrate fully all our platforms to ensure the very best of our content is available to viewers wherever they wish to view it.'

The broadcaster has already used its website to expand its TV content into new areas, with last month's footage of three alternate versions of the murder of Coronation Street character Liam Connor pulling in 650,000 views in a weekend.

The new series of I'm A Celebrity... Get Me Out of Here! is being backed by a new web celebrity tracker that can be embedded on Facebook profiles and blogs, while there will also be extra interactive red-button content and a mobile site for free highlight clips.

Media agencies say the broadcaster's plan to bring its TV brands and online closer together was logical due to the growth in online video in particular. Manning Gottlieb OMD's head of broadcast, Matthew Wigham, said: 'In terms of the way video is going, this makes sense. Agencies are setting themselves up to operate in this way, so more integration works.'

However, Sophy Silver, head of ITV Consumer communications, admitted there would be 'some trial and error' with the process. 'No one has quite got this process [of full integration] right yet.'

ITV cirector of television Peter Fincham now has an expanded remit of television, channels and online, edging out Jeff Henry, managing director of ITV's online arm, ITV Consumer, who is leaving the company. Chief operating officer for ITV Consumer, Ben McOwen Wilson, is now director of online with responsibility for all ITV's new media businesses.

It could be argued that even deeper integration could be achieved. Below the top-level changes, there are still separate directors for online sales, commissioning, marketing and

Dominic Cameron is heading the website, while Kate Bradshaw will remain head of online commissioning. Gary Cole, head of ITV's online ad sales, will continue to report to ITV commercial sales director Gary Digby, while Richard Waterworth will continue to head marketing for ITV online as part of ITV's wider marketing activities, which are run by marketing director David Pemsell.

With ITV's revenues from its broadcast division for the nine months to 30 September having dipped by 5% year on year, ITV is relying on continued growth in its online business. has doubled its users since relaunching in August 2007, reaching 8.3m in October, and video views have increased by 550% year on year.

Online sales for the first nine months of 2008 rose 6% to £25m, but the broadcaster has a long way to go to meet its target of £150m in revenue from online by 2012.

The broadcaster has admitted that online revenue for the full year and into 2009 will be hit by the advertising slowdown, with profitability further affected by its investment in Kangaroo. While bringing the online and TV content closer together makes good sense, ITV cannot rely on continued online growth to offset the decline in its traditional revenue streams.

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