ITV could share revenues with CE vendors
Despite a determination to extend reach, ITV is being careful about who it partners with in the digital domain and Gary Knight, Commercial Content Director at the UK’s largest commercial broadcaster, has made it clear that “Sales is sovereign” and that, in his view, it is a mistake for any broadcaster to relinquish control of its own advertising inventory and yield. In a world where more programming is being made available in more places and the ad inventory keeps expanding, and with video ad networks offering to help broadcasters monetize hard-to-sell inventory including pre-roll VOD, the UK broadcaster is determined to protect its role as a retailer.
Knight says the company’s distribution strategy is to get on as many devices as necessary to provide consumers with ITV content ‘any place, any time’. Emphasising the value of premium content, he says the company is trying to sell advertisers franchises around that content, and that those franchises are becoming bigger. But he warned against any distribution relationships that offer short-term revenues to a broadcaster but threaten the direct connection between them and their customer.
That might explain why ITV is backing the YouView hybrid broadcast broadband platform, which launches in the UK next year, but remains wary of Google despite the apparently successful partnership between another UK broadcaster, Channel 4, and YouTube for long-form content. “We are talking to YouTube but we have no relationship with them for long-form content at the moment,” Knight pointed out after the Future TV Advertising Forum last week. “We do not have to be in every distribution outlet but you need to be in enough of them.”
Pointing to ITV’s existing scale and the fact that television advertising is up rather than down (up 1% in the third quarter and up 2% over this year), he added: “We will have to choose partners that we feel help us to extend our distribution, but we do not need a big new distribution platform.”
Knight does not seem very impressed with Google. Speaking on a panel about new distribution models, including Connected TV, at the London conference, he was asked whether Google was the ‘elephant in the room’. He said they were actually the 800lb gorilla in the room, then referred to how they thought they would sweep across the television world and how they were now desperate to become a premium content company without becoming a fully fledged broadcaster.
Knight said later: “What worries me about Google is that one day they will also want to be inside the TV screen.” He is concerned that broadcaster content, made available via a search based model, would allow them to track everything the viewer is doing, referring to this approach as a ‘super cookie’. “That is very dangerous,” he believes. Knight thinks Apple is the more interesting company when thinking about partnerships. “The great thing is seeing how important the television screen is to both those companies,” he adds.
Knight did offer the hand of friendship to the more ‘conventional’ connected TV platform providers at the conference. Sitting alongside executives from Philips and Samsung on a panel, he would not rule out sharing advertising revenues in return for Connected TV distribution. “With every operator and every device it ends up being a business conversation so we will not be arrogant enough to say that we would not share, because there are certain instances where we might share revenue,” he revealed.
Knight emphasised that Connected TV is an evolution, rather than a new horizon for television. He believes Connected TV needs to provide a simple experience for consumers to work and that this will rely on search and recommendations that are fast and fluent. He also inferred that a new generation of remote controls could be needed.
Acknowledging the need for industry standards for advertising on Connected TV devices, and the need for independent audits to confirm the advertising measurement that is possible in this environment, he suggested that Connected TV “will be the final word in the wedding vows of television and the Internet.” He predicted that in five years time we will have bigger, better and bolder advertising opportunities for consumers thanks to this new form of distribution.
Knight told the conference that ITV welcomes connected devices generally, whether it is televisions or mobile devices, because as a company that ‘manufactures’ premium content it now has new ways to reach its audiences where and when they want their programming. He argued that while we may be watching content in different places, mass entertainment media will still be massively important. He believes Chris Anderson, author of the often-quoted book ‘The Long Tail’, which argues that the future of business is selling less of more, got it wrong. “There is no long tail without mass entertainment,” he declared.
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John Moulding joined Videonet as editor at the start of 2010, having spent over 10 years writing about digital TV and the various technologies that have simultaneously disrupted and enriched the television business. With Videonet he is focused on the unstoppable march towards multi-screen, connected and personalized television. John was launch editor at Cable & Satellite International (now CSI), where he spent six years, before helping launch New Video Technology, and helped develop the IPTV World Series (IPTV World Forum, etc.) conference programmes from 2006-07. At home, he takes a Sky triple-play bundle, watches around one-third of content time-shifted, but is generally still happy to turn on the TV and see what's on (he can also remember when TV shut down after lunch!).
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