The Royal Television Society is very much the establishment of British broadcasting, with an emphasis on the Big Five channels. However, the bi-annual Cambridge Convention had its mind very much on new media.
The more commercial side of the room has been concerned with falling advertising revenues and how generally it would fund original content in the future. A related issue was the fear that revenues would seep from the UK across the Atlantic to the likes of Hulu and Google. Eric Schmidt, the Google chairman and CEO, appeared via satellite from the BBC’s studios in New York and was questioned by the BBC DG Mark Thompson.
Schmidt argued that Google was already paying money to the RTS members, though there was little evidence from the halls that anyone had received a cheque. “We’re going to go all out on all of them to ensure that if you have great content, as people in your society do, then you can decide if you want it to be advertising supported or if you want people to pay a subscription”.
Schmidt said that the company paid between $5 and $6 billion (€3.4 and €4.1 billion) back to content providers through its Adsense product, targeted advertising pods, which he believes will over time become more profitable than the standard banners used by Google. “Our goal is to make large amounts of money for our content partners and if you assume that the UK represents 15% of that business then they have made around $500 million already.
However, Schmidt was adamant that Google was not going to emulate the likes of Bebo and MySpace by directly commissioning its own content: “The closer we get to that the more worried I get. We are a technology company.”
The other potential online threat is Hulu. Arguably the Arqiva-purchased Kangaroo interests pose as great a challenge, but the Australian-Canadian-owned company already runs the UK terrestrial transmission network so everyone kept quiet about that.
Asked by outgoing Channel 4 chief executive Andy Duncan as to what could be done, culture secretary Ben Bradshaw said he was open to ideas. “It is illogical that Hulu will come in and make revenues because the Competition Commission will not let us come together ourselves,” commented Gerhard Zeiler, chief executive officer, RTL Group and owner of Five.
United comments, too, from ITV COO John Cresswell. “They had an opportunity for the UK interest to come together and create an equity for UK plc, but this will now disappear to the West Coast.”
Luke Johnson, chairman, Channel 4, said that if the government and the Competition Commission wanted thriving competition they were going the wrong way about it. “If they want a healthy industry they should shove off”. He added Channel 4 had actively considered joining the Canvas project – where the BBC, ITV and Five are already present – and continued to do so.
Johnson, who had just lost his MD Andy Duncan, was brushing off earlier comments made by the veteran TV producer Phil Redmond. The creator of iconic shows Grange Hill, Brookside and Hollyoaks had suggested that the BBC and Channel 4 be merged as a means to solve the commercially run public broadcaster’s funding issues. “Is it right that the entire intervention of the government is towards one organisation, is that plurality, is that diversity” asked Johnson? “I’m optimistic that in time people will know there is more to plurality than BBC One to Four”
While both Hulu and the Arqiva venture are expected to be advertising supported, interest has been rising in micropayments, despite the failure by British broadcasters who so far have failed to establish the method in the UK.
ITV chief executive Michael Grade said he believed that micropayments would be “a part of our lives going forward,” but independent producer Alex Graham thought the importance of the show would have a big impact on whether viewers would be prepared to pay for individual programmes. “There is a reason for a show like Who do You Think You Are? because of the added extras, less for a show like New Tricks.”
Tony Cohen, CEO, Freemantle Media, said the production company was participating in a number of projects to establish both systems and consumer interest. He argued that the success of micropayments in online games, such as Battlefield Heroes, demonstrated there was already demand.
Surveys conducted for Freemantle showed a third of UK viewers would be prepared to use a system, the figure rising to 46% among the younger demographic. Viewers to the German soap Gute Zeiten, Schlechte Zeiten (Good times, Bad times), were already prepared to pay a little under a euro to watch the next day’s episode ahead of time.
Mike Darcey, COO of BSkyB, defended the regular subscription model, adding that the medium worked well for a minority sport such as darts. “The audiences are not huge, but they are passionate, and the subscription model converts passion into revenues.
Darcey added that he believed drama might be the next battleground for pay-TV following Sky One’s edgy dramatisation of Martina Cole’s The Take. “Drama on commercial television will be bigger, but blander, and the audiences will be smaller”. Sky One has renewed its interest in the genre, Darcey taking exception to those in the industry who according to him always excluded the broadcaster’s funding of the news and sports genres.
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