Media

Leila Abboud is a Bloomberg Gadfly columnist covering technology. She previously worked for Reuters and the Wall Street Journal.

Television bosses are very fond of reality shows and singing contests. They draw viewers back time and again, making them less of a gamble than a scripted drama that might flop.

ITV Plc has a similarly tried and tested formula for its business, put in place by CEO Adam Crozier. But, with his departure imminent, Britain's biggest commercial terrestrial broadcaster will need to be bolder and more creative.

That's not to diminish Crozier. His shift into TV production helped balance the ups and downs of the advertising cycle. ITV is a stronger, more profitable company than when he took over in 2010. Yet the Netflix revolution means this is an industry in a state of tumult.

Adjusting the Set
Adam Crozier helped turn ITV around
Source: Bloomberg

So it's puzzling that ITV chairman Peter Bazalgette, a TV veteran who pioneered Big Brother, has decided to let Crozier go before a successor has been found.

The new leader faces a difficult task. They'll have to retool the company to make sure it doesn't miss out on the online video advertising boom, while not cannibalizing its traditional TV ad cash cow. He or she will need to be as familiar with Snapchat, Facebook, and Netflix as they are with with sitcoms and dramas. Germany's ProSiebenSat.1 Media SE has shown how to develop short-form video channels for young people that are only distributed online.

And the new management will have to do all of this in a worsening ad market. ITV's net advertising is expected to fall by even more than last year's 3 percent decline because of a slowing U.K. economy.

New Opportunity
While TV ads remain ITV's main revenue source, they're not growing while online video ads are booming
Source: Bloomberg

Given the challenges, the handling of the transition hasn't been ideal. Crozier will leave on June 30, while finance director Ian Griffiths will be handed a chief operating officer role. He'll help run the company with Bazalgette until a new CEO's in place.

ITV say this is all totally normal, given that Crozier wants to move on to "other professional projects". But if the broadcaster's claim of having a well-developed succession plan were accurate, why the gap? Bazalgette should have known about Crozier's desire to leave and identified a successor. He took over as chairman a year ago and has been on the board since 2013. 

And while fresh blood may be a good thing, it won't be easy to match Crozier's record. The ITV Studios arm, which makes and distributes shows such as Coronation Street and The Voice, brought in nearly half of group revenue and a quarter of Ebita last year. The share price has almost quadrupled during Crozier's reign, while earnings per share have nearly doubled.

Legacy
Under Crozier, ITV beefed up its content production business
Source: Bloomberg

It may just be that filling Crozier's spot is more difficult than expected. A wish list for the new person might read as follows: mastery of the TV ad business, fluent in digital and mobile marketing, open minded about new forms of content, skilled in acquisitions, and an able manager of talent.

Running an old-world TV business in the internet age isn't easy. The reasons for Crozier's rather abrupt departure aren't entirely clear, but this may not be the worst time to go.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Leila Abboud in Paris at labboud@bloomberg.net

To contact the editor responsible for this story:
James Boxell at jboxell@bloomberg.net