Viewers continue to switch off ITV

ITV is floundering while its rivals grow stronger. But the unpalatable truth for executives at Britain's biggest commercial television station is that they are in a mire of their own making.

Of course, ITV is dependent on advertising, and advertising has suffered its biggest downturn since commercial television began nearly half a century ago.

But the same executives who exploited their role as gatekeepers to a mass commercial audience when times were good by making advertisers pay through the nose, have failed to adapt to changing circumstances. Smarter and richer rivals have destroyed ITV's dominance.

It now has the worst viewing figures in its history, its audience share slumping to just 22.5% last month. Its advertising total for the first nine months of this year is down 2.9% on the same period last year, while TV advertising for all commercial broadcasters is up 1%, according to investment bank CSFB.

Ominously, the bank quotes figures showing that ITV's advert bookings for September have increased by only 1.3% on the same month last year, when the terror attacks in the US sent advertising plummeting everywhere.

Meanwhile, a resurgent BBC, flush with its annual £2.5bn licence money, is ensuring BBC1 knocks spots off ITV1, even beating it during the crucial early evening peak-time during May. BBC director general Greg Dyke is the most commerciallyminded boss in the BBC's history, while Lorraine Heggessey, controller of BBC1, has proved an expert scheduler.

She has brilliantly exploited the strength of East-Enders and marketed BBC1 with slick promotional films in a way that has left ITV1 floundering. Dyke's swift decision to move the news from 9pm to 10pm has allowed the BBC to put on audience-grabbing dramas at prime time.

ITV is also being outthought. Its decision to schedule expensively acquired Premier League football highlights fronted by Des Lynam on Saturday evening was a ratings disaster. Its former blockbusting quiz show Who Wants To Be A Millionaire? has lost its sheen and, with the exception of the high-quality series Cold Feet, it shows little sign of being able to produce shows that will consistently win high ratings.

ITV has now lost its director of channels, David Liddiment, whose parting suggestion that BBC programmes be shown on ITV was a counsel of despair. The success of other commercial, free-to-air channels shows ITV how it should be done. Channel 5, under its highly regarded chief executive, Dawn Airey, has boosted its audience share, increased advertising revenue and drawn highly prized younger viewers from its rivals. All this with only about 80% national coverage.

Meanwhile, younger viewers are switching in droves from ITV to digital channels. Indeed, more viewers aged between 16 and 34 now watch digital channels than watch ITV1. ITV's own digital station, ITV Digital, went into administration in March, costing its owners, Carlton and Granada, well over £1.2bn. The pair proved incapable of competing with Rupert Murdoch's BSkyB. Now ITV is dependent on rivals to supply its own digital channels to viewers.

Carlton, led by Michael Green, and Granada, under Charles Allen, have long regarded a merger as a solution to their woes, but they have fallen out over price.

ITV will never see a return to its glory days. The growth of digital television has seen to that. And when the two cable operators, NTL and Telewest, finally merge, ITV will face even stronger competition. While the same management that brought shareholders the disaster of ITV Digital remain, hopes of recovery must be slim.