OVER a sushi lunch in a moodily-lit broadcasting facility on London’s South Bank, Michael Grade was adamant that it was going to be different this time.

Unveiling his plan 11 months ago to revive ITV, Grade used the expression “self-help” more often than daytime agony uncle Jeremy Kyle.

In a swipe at Charles Allen’s previous regime, Grade said he would not be “relying on regulatory fixes to create the appearance of growth” while mapping out a strategy to drive up ITV’s top line by 3%-5% a year until 2010.

How times change. Last week, Grade softened his lofty targets. He shaved £200m from the £1.2 billion he pledged to generate through the programme-making arm by 2012. And he pushed back the date by which ITV’s online division, including Friends Reunited, will reach income of £150m. It will now be 2012 instead of 2010.

Overall revenue growth, Grade cautioned, would depend on the health of the television advertising market, which looks set to decline by 5% this year.

True, the outlook for the media industry is awful. Next month, without the benefit of last year’s Rugby World Cup, advertising income at ITV will slide 20% — though the return in the autumn of I’m a Celebrity and the X Factor may arrest some of the decline.

Beyond the revenue targets, Grade’s thoughts are trained on September 25, when, rather than relying on self-help, he is hoping for a little assistance from ITV’s friends in high places.

This is the date that Ofcom, the media regulator, is scheduled to announce its latest thinking on the future of public service broadcasting (PSB). ITV is required to provide regional and children’s programmes but in a multi-channel world Grade claims this is an albatross round his neck, costing £190m a year to produce.

The licence also dictates that ITV must broadcast news at peak times, and it caps the number of minutes of advertising that can be broadcast on ITV1 — digital rivals can broadcast more.

All that was acceptable when the terms of ITV’s licence included the cheap analogue spectrum over which it broadcasts. With the final conversion to digital transmission only four years away, the value of that spectrum is dwindling.

“There is no dispute between us and the regulator on principle,” said Grade. “We both think the PSB licence will have a negative value. The difference is that we think it has a negative value now, but Ofcom still thinks it’s in the future.” He insisted his turnaround plan did not in- clude any relief ITV may get from Ofcom.

Some of it should be priced into the shares, which ended the week — in which the dividend was halved — up 4% at 44¾p.

A leaked Ofcom document shows that the regulator has virtually scrubbed ITV from the public-service debate, concentrating instead on how Channel 4 will co-exist with the BBC and whether it deserves a slice of the licence fee.

In a speech last month, Ofcom chairman Lord Currie answered criticism that Ofcom would give ITV an easy ride. “\ assert we are letting ITV off or have been hoodwinked,” he said. “Far from it. We would be delighted if the numbers looked different. But they don’t. The downturn will accentuate the pressures.”

Grade even has advertisers on side. “If it makes ITV a more viable entity, I don’t think that advertisers would feel particularly concerned whether ITV continues to have a public-service remit,” said Bernard Balderston, associate director for British media at Procter & Gamble, one of ITV’s biggest customers.

Of course, ITV could always hand back its analogue licence. It is loath to do that, not least because it would no longer be guaranteed a choice slot at the top of BSkyB’s and Virgin Media’s electronic programme guides.The best outcome is that Grade maintains a veneer of public service at low cost to shareholders, and keeps the benefits that it brings.

Perhaps more crucial to ITV’s future is overturning contract rights renewal (CRR), the formula introduced at the time of the Granada-Carlton merger to protect advertisers from ITV’s dominant position. With ITV still accounting for 45% of all spending on television advertising, that may be hard to sell.

However, CRR is in the hands of the Office of Fair Trading, which last Friday passed Global Radio’s £371m takeover of GCap Media, even though it creates a business controlling more than half of London’s commercial-radio market.

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