By Nick Higham BBC media correspondent

Things are serious at ITV.

The improvement in advertising revenue which coincided with the World Cup seems to have fizzled out: the summer hasn't been too bad, but reports suggest that revenue in September will be up barely 1% on last year.

Forecasts suggest advertising income for the year as a whole is likely to be down on last year.

As for viewers: they have deserted to Channel 4, Channel 5, digital channels, the BBC - anywhere but ITV.

James Bond helped ITV's ratings

There was much tut-tutting in the press last week when it emerged that the network recorded its lowest-ever share of viewing in July - just 22.5% in the country as a whole, and 17.6% in the growing numbers of homes with multichannel TV (Sky alone now boasts over six million subscribers - a further four million subscribe to cable services).

ITV's worst performance of all was on 25 July, when the ITV schedule boasted not one but two programmes hosted back-to-back by Carol Vorderman, Soap Stars' Lives and Better Homes.

Chris Tarrant may front a chat show

The network's schedules are being criticised for looking tired and unimaginative, but the problem is as much the strength of the competition as the weakensss of ITV's own programmes.

Big Brother on Channel 4 and the Commonwealth Games on the BBC have attracted huge audiences, with ITV apparently powerless to stop viewers deserting.

Even Coronation Street's audiences have suffered significantly in this relentlessly competitive environment.

Winning schedule

On the other hand, what goes down can also go up, and quite suddenly.

It is only a month since ITV was boasting the highest peaktime share of any channel over six consecutive nights.

True, the programmes in that winning schedule were mostly elderly faithfuls like London's Burning, Coronation Street, Taggart and James Bond, but there were some newer shows like Lad's Army as well.

This autumn ITV is promising us a new series of Popstars.

Who Wants to be a Millionaire may have lost some of its appeal, but there are rumours of a chat show fronted by its presenter, Chris Tarrant, to take on the BBC's Parkinson.

Struggle

Despite the advertising slump and the huge losses incurred on ITV Digital, Carlton and Granada have also gritted their teeth and stumped up an extra �25m to invest in the programme schedule, on top of the �750m originally earmarked in 2002.

The extra cash will go on drama, entertainment and daytime, and should help ITV fight back against BBC One, which is currently much the richer of the two main popular networks.

Nonetheless, ITV (like the BBC) is always going to struggle in a world in which more and more people are signing up to digital television, dividing their viewing time among more and more channels.

The network needs both a new director of programmes, to replace David Liddiment, and a new chief executive, to replace Stuart Prebble.

It may take a while to find suitably-qualified people to take on the jobs, given the scale of the challenge.