ITV Studios 'mulls major indie purchase'

ITV is reportedly considering a major acquisition of an independent production company to bolster its struggling programme producer ITV Studios.

Adam Crozier, the chief executive of ITV, wants to foster a "creative renewal" at ITV Studios to help the production arm generate more hit shows, such as Dancing On Ice and Channel 4's Come Dine With Me.

Crozier's five-year transformation plan for ITV involves 50% of its revenue eventually coming from sources other than TV advertising to reduce its dependency on the often fickle income source.

Last week, ITV hired Hat Trick co-founder Denise O'Donoghue to lead commercial strategy at ITV Studios, working with former Channel 4 director of television Kevin Lygo in the division's new senior management team.

According to The Guardian, senior ITV executives are now considering options for a major acquisition to enable ITV Studios to grow much more quickly.

Industry sources claim that potential targets of "appealing size and scale" include All3Media, the maker of shows such as Midsomer Murders, Hollyoaks and Peep Show.

ITV has not yet made an official approach for an acquisition target, but it is thought to be actively looking at possible deals in the UK and abroad.

One source said: "There is a general corporate understanding that acquisitions will be part of whatever happens in the content area. They will look at all of the sizeable options but you can't base a strategy simply on buying a big company and Crozier knows that. There is a lot of pressure on ITV Studios at a corporate level."

Another source added: "An acquisition of All3Media would solve problems for ITV Studios giving them increased turnover, profits and it will diversify ITV's revenue base and critically could drive formats that will sell overseas. Acquisitions have to be part of achieving the aim of doubling revenues from ITV Studios to more than £1bn."

Last week, Crozier said at a conference in Barcelona that ITV was "cash rich" and would actively consider major investments to unlock new revenue streams.