ITV, the self-dubbed "people's channel" may be about to celebrate its 50th birthday (September 22), but away from dewy-eyed nostalgia a firmer indicator of its fortunes comes with interim results on Wednesday.

The fortunes of the broadcaster have been mixed in the first six months of this year, with a declining share of viewing audiences offset by the positive news that regulator Ofcom will make deep cuts in its licence fee to help it cope with the challenge of the digital age.

ITV has already indicated that advertising revenues will rise by 3 per cent in the first six months of 2005, although this is slower than the 4.7 per cent growth recorded during the whole of last year.

Interim profits of £177 million are expected by analysts on Wednesday - higher than the £ 127 million recorded at the same stage of 2004 and putting the focus on to how the broadcaster will perform during the remainder of this year.

Paul Bates, an analyst at broker Charles Stanley, said: "Most of the cost benefits --both on an operational and regulatory basis - have now been achieved so ITV will need to reverse the top-line decline to be able to perform beyond 2005."

Chief executive Charles Allen has been in bullish mood about the future, pointing to the extensive investment in new drama highlighted by a return of Cracker to the screens this Autumn, among others.

This should help counterbalance flops like Celebrity Wrestling and Celebrity Love Island, which sank without trace earlier this year.

For despite one off victories like the licence fee, ITV is facing increasing threats from the fragmentation of television and the rising popularity of Freeview.

The consumer now has far more choice over which channel, and therefore which adverts they choose to watch.

While ITV 1's market share has dwindled in recent years, Mr Allen has pointed to the success of its sister channels ITV 2 and ITV3, which are now the most popular digital channels available.

He is now thought to be planning an ITV 4 and a children's channel as part of a strategy of maintain ITV's position as the number one free television commercial broadcaster, allowing adverts it carries to reach more of the public than any other station.

As part of this ITV has been using its channels to cross promote each other, with X Factor for example continuing elsewhere after the ITV1 show has finished.

The idea is that rather than go to the other digital channels, they stick with the ITV ones, keeping its overall audience numbers and therefore advertising revenue, up.

But ITV gets paid more for adverts on ITV 1 than its other channels, and if the viewers all migrate to ITV 2, 3, 4, whatever, it would end up losing money.

Then there's personal video recorders which allow viewers to record programmes, and also allow them to niftily fast forward and avoid advert breaks entirely, and, obviously, affect ITV's advert revenues.

Not to mention internet-based TV...

Oh dear. It may take more than a return of Fitz to sort this one out.