Local video news on the web: It’s the independents that count, not Archant or the BBC

Posted by Peter Kirwan on 30 May 2008 at 11:29
Tags: BBC, Johnston Press, Trinity Mirror

So which side are you on? Do you like the BBC’s proposal to create up to 300 new jobs in journalism by adding video news to its local websites?

Or are you with Sly Bailey of Trinity Mirror and Ian Davies of Archant, who fear that the BBC’s investment will crush local newspapers’ “embryonic” sites?

It’s an ugly choice. Face-to-face with the nasty structural reality, the in-fighting has started in earnest. Naturally, both sides have big credibility problems.

This week, it emerged that the Corporation’s online operations have over-run their annual budget of £74m by 48%.

That’s impossible without the connivance of very senior managers. The inevitable result should be high-level sackings.

Instead, we got weasel words from BBC trustee Patricia Hodgson. After investigating, she has decided that the overspend isn’t attributable to human beings. Instead, the “management structure for online activities in the BBC” is to blame.

To cap it all, the BBC’s online operations have been promised £150m+ to spend next year — if they stick to unspecified tighter financial controls.

With this simpering response, the BBC Trust is steering the Corporation’s mighty hull toward a big rock marked The End Of The Licence Fee. Politically, this is about as inept as it gets.

You can’t blame Mark Wood, the chief executive of ITN, for seeing all of this as sinister — rather than merely tragic.

“Commercial competitors thought the BBC website was already over-funded at a declared budget of £74.2m. Thanks to the work of the trust we now discover the real figure is £110m rising to £114m next year.

“On top of that, the BBC plans to add £39m of funding which the trust has limited powers to prevent. That means that instead of a £74m website we are dealing with a £153m website.”

The regional press has a different credibility problem. In fact, it has several of them.

Ian Davies’s reflexive attack on a BBC that is bending over backwards to minimize the perceived threat feels a bit overdone. For example, there seems to be potential for collaboration with local newspapers in the BBC’s proposals, plenty of scope for linking and driving traffic. But these ideas have been lost in the storm of invective.

Another problem: Most regional newspaper chains enjoy de facto local monopolies. In the absence of competition, monopolies will spend peanuts on developing their businesses.

Only a few weeks ago, for example, Tim Bowdler, chief executive of Johnston Press, told analysts that the company had already made its big investments in what he calls “digitization”. Henceforth, he said, developing digital operations “needn’t cost an arm and a leg”.

Really? That’s a claim that would meet with skepticism at the Telegraph, the Guardian — and lots of other places where web projects demand constant funding and development.

Meanwhile, on his blog Out With A Bang, journalist-entrepreneur Rick Waghorn says that the big regional chains could afford to compete with the BBC — if they wanted to:

“Look at the money that is still — even now with all the challenges and new competitors that they face — still being channelled shareholders’ way. Can we find £68 million over five-years in there, somewhere? Probably…

[But what are the] chances of any one of those boys getting up at an AGM and saying: ‘Look people, we need to invest in our medium and long-term future… so we’re not doing a dividend this year…’?

The reality is that dividends are still flooding out of these companies like there is no tomorrow; or maybe, that’s because they know, newsprint-wise there may be no tomorrow. . . So, in part it’s a question of priorities. Who we looking after here?

The answer is that regional newspapers are looking after their shareholders. In doing so, they put print media first — because that’s where the cashflow is. But by doing that, they jeopardize their ability to invest in the future.

So there we have it. You can throw in your lot with a spendthrift with the managerial-financial equivalent of Tourette’s. Or a miserly incumbent who has mortgaged the future to pay for the present.

Some choice. I’d don’t envy Ofcom.

That said, there is a third voice that should be heard amid all of the shouting.

Rick Waghorn, you see, is just the kind of journalist-entrepreneur who could, and should, represent a major part of the future of local news provision.

A former sports reporter on the Norwich Evening News, he has poured his redundancy money into setting up three vibrant web sites for fans of Norwich City, Ipswich Town and Colchester United.

Waghorn and entrepreneurs like him remortgage their homes and work 80-hour weeks. They don’t get audiences with Lord Fowler’s committee in the House of Lords. Nor do their views become page leads in the Guardian or Press Gazette.

But they’re the real innovators.

It would be positive to see Ofcom acknowledge businesses like Waghorn’s as the “embryonic” operations that actually matter.

Far from Google’s slick conference, an awkward squad of media owners and agencies starts to protest

Posted by Peter Kirwan on 28 May 2008 at 17:34
Tags: BBC Worldwide, Google, ITV, Media, Trinity Mirror

Was James Ashton of the Sunday Times invited to meet Sergey Brin and Larry Page at Google’s high-falutin’ Zeitgeist conference in a hotel on the outskirts of Watford last week?

It doesn’t look like it.

Last weekend, Ashton chose not to focus on Google’s own version of the World Economic Forum, complete with cameos by Gordon Brown and Queen Rania of Jordan.

Instead, he latched on to something that Google would rather not see mentioned: its evident monopoly of the search market.

Ashton’s piece kicks off with Neilsen’s suggestion that Google’s market share has risen from 57% all UK-based searches in July 2005 to 81% last month.

Google, he adds, is used on average 23 times a month by every person in Britain. Ashton writes:

It has got to the point where media buyers cannot afford to exclude Google from their online campaigns by relying on the smaller search engines of Yahoo and Microsoft.

Against this backdrop, Ashton wheels out an impressive cast of malcontents. There’s Sly Bailey asking The Lords for lighter touch regulation. (“I am not arguing that they should be regulated more, I am arguing that we should be regulated less.”

Alongside her, there’s Sir Michael Grade of ITV who (in Ashton’s words) “regularly invokes Google’s liberty when campaigning to overhaul contract-rights renewal”.

Or how about John Smith, chief executive of BBC Worldwide, who recently wondered aloud at an industry conference whether regulators “might start to gain an interest in search engines.”

Here, too, is Jason Carter, the UK managing partner for digital at mega-agency Universal McCann, asking for relief. (“We would like more competition in the marketplace.”)

At this point, it’s worth stepping back and looking at the anti-Google coalition stitched together by Ashton.

It’s cross media (from Trinity Mirror to ITV). It’s both public and private sector (from ITV to BBC). And it includes both advertisers and media owners (who typically agree on something — anything — with about the same frequency as our planet receives visits from Halley’s Comet).

The problem, as one of Ashton’s sources put it, is that regulators “aren’t sure” how to regulate Google.

With good reason. The challenge is international — and complex. And for all the regulators know, Google’s plans to move into other forms of advertising might not bear quite so much fruit as its ventures in search. That would leave a company dependent on rapid growth in a difficult situation.

For all of that, Ashton’s piece does point to a coalition in the making. Yes, it’s blurred round the edges and unsure of its aims — but it’s a coalition none the less.

Big Brother boss says: Kill off TV news to fund my Chirac-style folly

Posted by Peter Kirwan on 23 April 2008 at 17:18
Tags: BBC, BBC Worldwide, BSkyB, Google

Whatever happened to David Elstein?

Once upon a time, Elstein was head of programmes at Sky. As part of his job, he regularly called for the abolition of the licence fee.

In the market for ideas, Elstein’s purpose was to say the unthinkable — and get it incorporated into debate, to his employer’s advantage.

These days, Peter Bazalgette, the former public school boy responsible for a raft of trash TV, including Big Brother, seems to have taken Elstein’s place.

There’s only one slight problem. Like a lot of blokes in their mid-50s who have made lots of money from Big Media, the founder of Endemol hasn’t got much of a clue about the emerging digital universe.

At a Royal Television Society dinner last night, Bazalgette blithely called (among other things) for the government to abolish the news and current affairs obligations of both Five and Channel 4

By doing this, both channels would (presumably) become cheaper to produce and more popular.

HM Government, Bazalgette suggested, could then cream off some of the resulting expansion in profits by charging both channels for their use of digital (Freeview) spectrum.

In addition, Bazalgette proposed the privatization of BBC Worldwide, BBC Radio 1 and 2 and Channel 4.

After raising £3bn+ from such ruses, Bazalgette wants the government to launch something called, er, Boggle.

What Bazalgette has in mind is a “public service distribution platform and search engine”.

And its purpose? As Bazelgette sketchily framed it, Boggle would “link the existing online offerings of museums, galleries, theatre companies, opera houses and concert halls”.

It would also give all of these venues “seedcorn monies” to “improve” their “content offerings”.

But that’s not all. Boggle would also allow the “next generation of comedy talent” to post videos. The most popular would attract “some Boggle funding”. Last but not least, Boggle would create “a search engine to market it all”.

Confronted with this dim-witted slew of half-baked concepts, it’s hard to know where to start.

“Seedcorn monies” for museums? Fine. A few hundred million wouldn’t go amiss. But do we need a new quango to distribute it? What does the Arts Council do for a living?

Hasn’t Bazalgette heard of YouTube? Remarkably enough, young comics already use it to post videos of their gags. And then there’s Google, which owns a perfectly good search engine already. . .

In his haste to embrace a broadband future that he patently doesn’t understand, Bazalgette — the free market provocateur — actually ends up sounding like former President Chirac, who decided that French taxpayers should foot the bill for a French language search engine designed for French people.

A blizzard of straight-faced reports accompanied Bazalgette’s speech. Somewhere in them, I read that Ofcom will “study” this plan for a new quangocracy whose birth requires the death of much of what remains of news and current affairs on independent television.

Toss it into the nearest litter bin, more like. If this reflects the standard of debate within the TV industry, Big Media is in more trouble than we thought it was.

Come back David Elstein; all is forgiven.

PS: According to his biography on the Royal Television Society web site, Peter Bazalgette is currently “building a portfolio of investments in digital growth companies”. On the evidence of last night’s speech, widows and orphans would be well advised to invest their money elsewhere.

Notable + quotable: Tuesday 27 November 2007

Posted by Peter Kirwan on 27 November 2007 at 11:39
Tags: BBC, Media

BBC agrees terms of trade with new media independents
Deal puts digital content folks on same footing as TV production houses
http://www.guardian.co.uk/media/2007/nov/26/bbc.television3?gusrc=rss&feed=media

Mediametrie invests �25m to track consumers’ total media consumption
In the UK, BARB is thinking about something similar. . .
http://www.iht.com/articles/2007/11/25/technology/measure26.php?WT.mc_id=newsalert

The Economist seems interested in exploiting social media. . . sort of. . .
Nod to Bagehot: Online debates are entitled “Severe Contest”
http://www.brandrepublic.com/News/769069/The-Economist-launches-series-online-debates/

British Retail Consortium forecasts Xmas High Street spend to rise 5% YOY
Signs of stress: volumes driven by new stores and discounting
http://www.marketingweek.co.uk/item/58748

House prices fall at fastest rate since 2005
New mortgage approvals at lowest level for a decade
http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article2943603.ece

Big TV: Don’t worry, be happy

Posted by Peter Kirwan on 26 November 2007 at 10:42
Tags: BBC, ITV, Media

From Maggie Brown in the Guardian, a (small) raft of reasons to love Big Broadcasting:

1) BBC1 is “seeing only a modest drop in audiences this year”. And ITV1 is “delivering its best performance since 2001″. (OK, the latter is mostly due to sporting drama and the decision to kill kids’ programming in the afternoons, but let’s not quibble, eh?).

2) The average UK household receives 127 TV channels. Patrick Barwise, professor of management and marketing at London Business School, argues that the Big Five “heritage” TV channels spend �2.6bn a year on programming. And the rest? Just �100m.

3) Freeview is now installed in 14m homes versus Sky’s 8m. Sky subscribers tend to stop watching the Big Five more rapidly than Freeview customers.

4) Re-runs on secondary channels are maintaining overall viewing figures. So if you string together the eyeballs that watch both ITV1 and ITV2, audience levels are “largely stable”.

And, er, that’s about it.

As a list of positives, this isn�t hugely impressive. And Brown barely tries to defend Channel 4 (”suffering”) and Five (”on a slippery slope”).

Brown’s positives are wrapped up plenty of fizzy prose — the kind that might tempt Big Five sales execs to think that all is well in their world.

Hopefully, they won�t get as far as the final par, which notes a projection from the think-tankers at DGA. This suggests that the Big Five’s audience share will decline by 13% to 58.7% by 2012.

For the sake of argument, let’s assume that programming budgets follow suit.

We’d see a rise in multi-channel budgets of �46m by 2012. And, ahem, a decline of �338m in Big Five budgets.

Net loss? Err, something like �292m.

Searching for a radio star: who wants to run GCap?

Posted by Peter Kirwan on 26 November 2007 at 10:28
Tags: BBC, Chrysalis Group PLC, Guardian Media Group, Media, Yahoo, emap

The FT’s Ben Fenton has a depressive take on the prospects for commercial radio.

The BBC is “crippling” the commercial sector, writes Fenton. Meanwhile, growth in digital audiences — the object of much investment — is slow. (85% of homes possess digital TV; only 22% possess a DAB radio.)

The remedy? There are two schools of thought.

The first is represented by Grant Goddard of Enders Analysis, who reckons that commercial radio needs “a forward-looking strategy”.

This would involve more competition and plenty of investment in content. Of course, the assumption here is that radio has a future as a growth medium.

The second — much more conservative — approach is being championed by the private equity investors who are bidding for EMAP’s radio business.

In Fenton’s words, this camp would like to see “two, or at most three, big private players sitting around a table and sharing out stations like a fixed game of poker”. The carve-up would reduce competitive pressure. Cost cutting would do the rest.

If you take the view that commercial radio is mature, or declining, the poker game approach makes some sense. The market share configuration of commercial radio looks oddly like that of a growth industry:

GCap — 29%
EMAP — 23%
Chrysalis — 11%
Guardian Media Group — 11%

Meanwhile, three out of four of the leading players are already privately-held, or soon will be.

As Phil Riley, the former Chrysalis Radio chief executive who is running a private equity bid for EMAP Radio, puts it:

“The decisions that need to be taken to make this industry. . . would be taken so much better by companies that were not thinking about what effect such-and-such a move would have on investors and the share price”.

Of course, Ofcom would need to be squared before the game could commence. But the process of softening up the regulator has already started.

According to some, last week’s retirement of Ralph Bernard, the veteran chief executive of GCap, brings the industry a bit closer to Game On.

So who will take the reins at GCap after Bernard’s retirement?

If GCap London’s managing director Fru Hazlitt gets the job, it’ll answer a question I’ve been asking since 2005, when this feisty former sales executive quit her job as managing director of Yahoo Europe to become. . . chief executive of Virgin Radio.

In doing so, Hazlitt became that rare thing — a media executive whose career path led from Web 2.0 back to Big Media. Usually, the traffic in talent goes in the opposite direction.

Getting the top job would also explain why Hazlitt accepted GCap’s offer of a seat on the board when she left Virgin Radio in January of this year.

Hazlitt is known for her amusing turn of phrase. At a recent industry conference, she was asked to comment on a Welsh newspaper story criticizing the London 2012 Olympics.

She commented: “Who cares what the f***ing Welsh think?”

There are some who suggest that Hazlitt left Yahoo — with its famously US-centric management style — after saying the same thing once too often about her American overlords.

At Numis Securities, Paul Richards seems perturbed by Hazlitt’s candour. Her chances of getting the top job won�t have been helped by those comments, he suggests.

Has Richards ever heard the language round a high-stakes poker table? Presumably not. . .

PS: Nice to see Ralph Bernard rolling back 40 years of progress toward gender equality in his final conference call with the media.

“Thank you gentlemen, it’s been a pleasure,” he said at the end.

Then, after a pause: “And ladies, sorry . . .”

Ah, bless.