Trust – it’s a must
Following publication of the findings of the Deloitte review and issues involving trust in television across all UK broadcasters in 2007, ITV committed to improving training and awareness for all employees involved in programming and interactive services.

Two compulsory online compliance modules were launched, supported by an internal campaign seeking to raise awareness of the importance of compliance and trust in ITV. The campaign included a booklet – Trust: it’s a must – for all new joiners and production staff.

This section summarises the issues that arose, the associated regulatory processes, and the steps taken by ITV to ensure that such problems do not recur.

Viewer votes and competitions have been a feature of television programming for decades, but the advent of mobile phones and premium rate telephony enabled broadcasters to build on such interaction and to generate revenues in the process. Over recent years, use of PRS in ITV and GMTV programming – and the associated revenues – grew rapidly. Such revenues were generated by PRS elements in mainstream programming, as well as from dedicated participation channels and services, such as ITV Play.

ITV

In March 2007, following press reports alleging irregularities in ITV programming, ITV announced the immediate suspension of all PRS activity and appointed Deloitte to carry out a review of PRS in ITV programming. Deloitte reviewed PRS procedures in all current programming; identified means of reducing the risk of failures arising in the future; and investigated PRS-related incidents in ITV programmes broadcast from April 2005 to March 2007.

In October we published the findings of the Deloitte review and ITV investigation into PRS within our programmes. Out of more than 100 ITV programmes and series, serious editorial issues were identified in three entertainment programmes. The Deloitte review also highlighted serious technical issues on five occasions affecting two further ITV shows; on none of these occasions did the problems alter the outcome of viewer votes. In addition, The British Comedy Awards 2005 is the subject of a separate and ongoing investigation by media law firm Olswang.

The review identified failings in the way ITV integrated PRS into its programming: appropriate account was not always taken of the impact of editorial actions on the integrity of interactive elements in programmes. Agreed and consistently applied procedures, controls and ways of working between the parties involved in the process were lacking. In addition, supporting technology, in the most part supplied by third-party suppliers, did not deliver the required level of service consistently.

In response to the review, ITV announced a comprehensive reimbursement scheme and committed that any unclaimed element of the potential total to be reimbursed – around £7.8 million – would be donated to charity in 2008.

ITV also announced changes to the operation of PRS, including the following:

• Suspension of all SMS and Red Button voting in live programmes, until systems are in place to ensure timely delivery of votes;
• Reducing ITV’s dependency on third party providers, by bringing telephony service provision in-house on programmes wherever possible;
• Introduction of training across ITV to ensure that employees are aware of their responsibilities in respect of the operation of PRS;
• Strengthening ITV’s compliance resources with the addition of a dedicated Interactive Governance team.

The problems identified in relation to ITV’s PRS are being considered by Ofcom which could result in fines or other sanctions. ITV expects to learn the outcome of the regulatory process in 2008.

The issues identified by Deloitte relate largely to PRS elements in mainstream ITV1 programming, rather than participation television programming broadcast under the ITV Play brand. However, in March 2007, ITV closed its digital participation channel ITV Play. From the end of 2007, ITV ceased broadcasting ITV Play participation television programming on all ITV channels.

GMTV

In April 2007, serious shortcomings emerged relating to competitions on GMTV and in particular selection of winners before phone lines had been closed in competitions run between August 2003 and February 2007.

In response, GMTV suspended all competition activity and contracted Deloitte to undertake a review and to seek to identify affected viewers. In July 2007 GMTV confirmed a package of measures aimed at restoring the trust of viewers. These included offering full refunds to all entrants who were wrongly excluded; holding 250 free prize draws, each with a £10,000 prize for affected entrants; and making a £250,000 donation to the children’s charity ChildLine. The Managing Director and Head of Competitions both resigned from the station.


GMTV also introduced new measures for the management of PRS going forward (although PRS competitions have not yet returned to GMTV programming). These included:

• Development of independently audited compliance checks and procedures;
• Regular inspection of future service providers; and
• Ensuring that future competitions allow for orderly winner selection in a timely and compliant manner.

Following an investigation completed in September 2007, Ofcom imposed a fine of £2 million on GMTV and required GMTV to broadcast a statement of the regulator’s findings.

In addition to reimbursement costs and donations, ITV has incurred costs in the process of reviewing its PRS operations of approximately £2 million. Based on current estimates and before any potential Ofcom fine on ITV, an exceptional operating charge of £18 million associated with PRS activity has been taken by ITV in the full year 2007, including the £5 million pre-exceptional operating charge taken at the half year.