IN a tiny studio that used to be inhabited by the defunct quiz channel Big Game TV, ITN’s biggest new project for seven years is taking shape.

Before a trademark yellow backdrop, the crew for Setanta Sports News, a 24-hour-a-day rolling news service, is going through another dry run in preparation for its launch on Thursday.

To compete with Sky Sports News, ITN chief executive Mark Wood said the format will be “young and fairly chatty” with a heavy emphasis on Premiership football – though golf, tennis and racing will be part of the mix too. To the untrained eye, it appears to focus on a reliable combination of talking heads and scrolling statistics.

After recruiting 60 staff in the past month, Wood said: “We think our visuals are better than Sky’s. We are looking for more exciting presentation and we want more reporting.”

Rolling general news may not have caught on in the same way here as in America, but Britain’s insatiable appetite for sport – even after English football’s defeat by Croatia last week – guarantees a decent audience from the starting whistle.

Setanta Sports News, a joint venture between Setanta and Virgin Media, is intended to broaden its sports coverage in competition with BSkyB, part-owned by News Corporation, the ultimate owner of The Sunday Times. The satellite and cable channel is planned to run for three years initially and could bring in up to £10m a year in revenues for ITN.

That gives the organisation a third leg to stand on after ITV and Channel 4 news contracts that run out in 2012 and 2010 respectively.

The ITV News Channel cost ITV a packet, but its closure in late 2005 after five years dented profits at ITN, which produced it on a fixed contract.

For 2006, profits fell 31% to £5m on sales 5% lower at £98.7m. The thin margins show it is tough to get rich on news provision alone.

Wood thinks 2008 will be brighter, not least because of the return of News at Ten, bongs and all. “I’m very excited,” he said. “It’s a bigger audience and a chance to compete head-on with the BBC. We have a confident team producing a very pacy show.”

The scheduling does not mean higher income, but helps ITN’s reputation. ITV chairman Michael Grade’s enthusiasm for Sir Trevor McDonald et al comes as Grade prepares to swing the axe in ITV regional news, on which ITN relies for some of its coverage.

Wood said: “Our chief concern is that there are cameras out there on the ground gathering news. So far, we don’t see any reason why it would have a serious impact. From ITV’s point of view, employing a lot of people to produce 17 regional news programmes doesn’t sound as if it is commercially tenable or durable. It begs for rationalisation.”

Of course, Wood, previously editor-in-chief of the Reuters news agency, must tread carefully when talking about ITV, his top customer as well as 40% shareholder. Many think 2008 could finally be the year that ITN’s federal ownership structure is simplified. United Business Media and Daily Mail and General Trust would be willing sellers of their 20% holdings at the right price.

However, ITV, the most obvious buyer, prefers to divert its scant reserves to searching for independent producers to resuscitate prime-time ratings.

Threats from then ITV boss Charles Allen two years ago to set up his own news division if fellow ITN shareholders didn’t sell out to him came to nothing.

Now, Channel 4, ITN’s second-largest customer, is eyeing a stake. And, intriguingly, Reuters, the remaining shareholder, believes ITN’s archive business would sit well with its own media-supply arm. However, it has no interest in wholesaling bulletins to ITV, pointing to a break-up of the business if it had its way.

Wood said that, with shareholders who have said they were not in it for the long term, change was inevitable. ITN had to be turned into an attractive business and that would open the door to new opportunities.

Investing in the decades-old archive of footage has been Wood’s plan to give ITN a greater say in its own destiny. Shareholders waived their dividend last year to give him the cash to begin transferring clips of the youthful Rolling Stones’ first performances and John F Kennedy’s speeches from dusty newsreel.

So far, 10%, or 80,000 hours of the archive has been digitised, making it far easier to sell to broadcasters, advertisers and corporate clients. Royal clips and wildlife are popular.

For next year, Wood forecasts sales of almost £20m from the archive, helped by exports, making up 15% of group income.

Education is also a buzzword. ITN has joined Ten Alps, Bob Geldof’s production firm, to bid for the government tender to operate the teacher-training satellite channel Teachers TV.

And with Espresso, its part-owned learning materials business, Woods has forged a partnership to sell packages of video clips for viewing in, say, history lessons, to other educational publishers, including Pearson.

Espresso has a 55% market share in streaming bulletins into English primary schools. After acquiring 4 Learning from Channel 4, it is getting into secondary schools too.

“It’s a way of getting into new markets,” said Wood.

Then there are ITN’s own web ambitions. Serious news in a user-friendly wrapper may be ITN’s intention on ITV1, but that gives way to acres of showbiz and sport as it pursues an online audience of its own with dedicated channels on YouTube, Bebo and mobile.

Wood said: “It’s a way of getting people to look at news coverage who otherwise might not bother at all.” A news clip from Asia showing a model tucking into rice piled up in a new food-carrying bra has had 315,000 viewings so far. Earning money by overlaying the clips with advertising is the next stage.

Away from prime time, this appears to be the future of news – at least if providers want to remain profitable.

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