Political commentator Andrew Neil says he has changed his view and the so-called insurgents are not as disruptive as originally thought.
Giving his annual state of the Union address on the position of the UK broadcasting market on behalf of SES, Neil said TV had taken over the computer rather than the other way around as scripted television, particularly from premium channels, had created a new golden age.
Digital through Netflix had become just a distribution platform, whereas TV was the real innovator.
Turning to his former employers, where Neil was executive chairman in the late 1980s, he said the last period of technical innovation at Sky began in 2003 when then chief executive, now chairman, James Murdoch was last at the helm.
Neil said he believed the new Sky Q box would concentrate viewers minds on the Ultra HD format. “Just as the F35 fighter aircraft will be the last ever manned fighter jet, this will be the last Sky box, after that it will all be in the cloud.” Neil says this will see off the compete effectively threat of Netflix and Apple and as long as Sky continues to offer the content that it does, then Sky Q will take the broadcaster to the next stage.
Too much conditioned from a newspaper background from 20 years ago I saw the effect digital had on print. “Netflix is not the great disrupter and TV will not die in 2030 as is the claim of Netflix CEO Reed Hastings.”
Neil said there was pain at the margins for broadcasters, but Netflix was starting to struggle in the United States. “It’s not a disrupter, it’s a network.”
He believes the BBC charter will be established on the same terms as the previous settlement, the licence fee continuing for another five years, rising in line with the consumer price index, which said Neil would be OK, taking into account the fact that the CPI is hardly rising at all.
The European Referendum will in part help the BBC, particularly if the June vote goes against the government, and Britain pulls out of Europe. Even if there is a vote to remain the BBC will be pushed down the agenda as ministers turn their mind to more pressing matters of state.
BBC News channel would survive, it was inconceivable that a major public service broadcaster would not have a rolling news channel.
With the corporation in charge of the free licence fee for the over 75s, Neil anticipates the benefit will be removed from 2020, giving the BBC a cash boost.
With the danger of the BBC surviving relatively unscathed, the sale of Channel 4 might be back on the agenda, though Neil doesn’t believe there would be enough money in the sale of the company to make it worth the while for the Treasury.
ITV, says Neil, is a more attractive takeover target than 12 months ago, with Liberty Global in the frame as a potential takeover. The Virgin Media owner already holds 9.9%.
“Any company that has six years of double digit profit growth is an increasingly attractive takeover target,” said Neil. He said ITV was following in the footsteps of NBC and CBS in the United States, by breaking out of the spot advertising market.
Online service ITV Hub was beginning to build a profile of its audience that could target viewers much more effectively than through its main linear channel.
