A Look Back At 2000…
2000 was the year when media woke up to the realities of the digital age. Mega-mergers abounded as companies recognised the benefits of consolidation and vertical integration. Most significant for UK markets was Granada’s domination of ITV and the paving of the way for a single ITV with the Government’s White Paper. In publishing, brands became all-important and magazine companies reorganised their companies around them in order to secure cross-media deals. Behind everything, however, was the net. Everyone wanted a slice but not many got it right and the year closed with a dose of pessimism surrounding new media almost as large as the optimism which began it…
January
In the first week of the new year Granada joined United and Carlton in the bidding war for ITV franchises by asking the trade and industry secretary for consent to merge with either of its rivals, paving the way for its takeover of United later in the year. On an even bigger scale AOL confirmed its plans to merge with Time Warner, thus creating the “the world’s first fully integrated media and communications company”, valued at $350bn. Closer to home, Scottish Media Group agreed a £225m takeover of Ginger Media and Flextech and Telewest agreed the terms of their £2.26bn “vertical integration” merger. Even agencies got in on the act with BBH and Burnett merging their respective UK media operations Starcom and Motive, forming the Starcom Motive Group.
A sharp increase in advertising revenue brought in the new year, driven by a surge in dotcom advertising in the run-up to Christmas. An internet goldrush ensued as media owners rushed to stake their claim on the fastest-growing medium of all time. TV companies were not to be left out: Channel 5 agreed to take stakes in web companies in return for allowing them airtime; Channel 4 quadrupled its online investment to £15m for the year, with its first launch expected to be a gay and lesbian lifestyle portal; BSkyB strengthened its online interests with two new appointments to boost its e-commerce opportunities.
ITV was not celebrating however; it was forced to adjust its peak time audience share targets for 2000 after narrowly missing its 1999 target of 39%. 2000’s target was was set for 38.5%.
And Britain got its fourth national commercial radio station when Kelvin MacKenzie’s Wireless Group launched sports station Talksport in direct competition with BBC Radio Five Live.
February
Radio recorded record levels of revenue during the final quarter of 1999 – at £131m – driven by a growth in national advertising which grew by 21.5% for the year and 20.4% for the quarter. GWR chief Ralph Bernard called for a relaxation of the rules surrounding radio ownership in the Government’s forthcoming Communications White Paper, just ahead of RAJAR results which saw the BBC increase its lead over commercial radio. The following day Chris Smith announced the publication of the White Paper later this year.
Meanwhile, global advertising group WPP said its clients were turning away from television advertising as a result of rising costs. It said that network inflation was rising by as much as 5-10% each year on both sides of the Atlantic, caused partly by increased pricing by an oligopoly of media owners and partly by a decline in network audiences. Elsewhere in television Channel 5 was valued at £1bn as Warburg Pincus put its stake in the broadcaster up for sale and the BBC‘s digital licence fee plans were rejected by the Government and replaced by a £3 increase on licence fees across the board.
Circulation figures from ABC showed the lad’s mag phenomenon suffering, with both Loaded and FHM seeing their circulations tumble year on year and 60% of women’s monthlies were down in a year on year analysis.
Interactive services became the battleground on which broadcasters fought for digital subscribers. Telewest‘s Active Digital and BSkyB‘s Open both signed deals with major retailers early during the month. A report from BMRB said e-commerce was booming and web frenzy continued with the GWR Group launching its web company, Ecast Ventures, and Scottish Media announced plans to spend £10m on its web strategy.
March
Sport dominated media news during March as broadcasters prepared for the new rights deals for Premier League games to be unveiled, opening up the rights to multiple platforms for the first time. Sky bought a stake in Chelsea and signed a net deal with Spurs and NTL bought a stake in Middlesborough. Meanwhile a row broke out between the two national sports stations – BBC Radio Five Live and Talksport – sparked by TalkSport’s claims that it would be broadcasting live coverage of Euro 2000. By “live” the station meant off-tube, but the BBC, which owns the rights, was not happy with the description and said its rival was “misleading listeners”.
The Newspaper Society announced an action plan to increase the regional press’s share of the national advertising market. Its initiatives include investing £100,000 in ad effectiveness research, the launch of an artwork delivery system, and improved reproduction standards.
Altavista was the first to unveil an unmetered internet access package, followed swiftly by NTL and then BT. The unviability of such packages became apparent later in the year as BT stalled in the provision of its flat-rate circuit to its rivals. And the Independent Television Commission (ITC) published a consultation paper on the regulation of interactive services, just days after BSkyB announced the launch of the first interactive ad.
April
The BBC said goodbye to Birtism as Greg Dyke took over as Director-general. His first act was to unveil “one BBC” by sweeping away a whole level of management in a move to distance himself from the bureaucracy of the Birt era. He told staff he planned to reduce the amount of money spent running the BBC from 24% of its total income to 15%. “Cutting duplication across the BBC should make us more agile and more flexible, giving us money to put into the heart of the BBC – the programmes.” Dyke said.
Capital Radio won the bidding battle for control of Border Television after a lengthy bidding war which saw the group reject a bids from Scottish Radio Holdings and Scottish Media Group. Later on in the month Granada agreed to purchase Border’s television assets for £50m.
The ITC was accused of “nannying” after it asked the ITV network to propose measures to counter the decline in audience figures for its news programmes following the demise of the News At Ten. “The fact that ITV evening audiences are generally up shows that people like what they are being given,” said IPA Media Policy Group spokesman Jim Marshall. “Against this background, demanding that stations should increase the news viewership smacks of forcing the public to watch what is good for them, rather that what they would like.”
May
The volatile new economy took its first casualty this month as online sports retailer, Boo.com, collapsed through lack of funds. Bright Station bought the group’s e-commerce technology and the company made a resurrection later in the year, but its downfall marked the start of a loss of faith in the new media which would characterise the second half of the year.
Women in media hit the headlines as Elisabeth Murdoch announced her decision to set out on her own after leaving her father’s company, BSkyB, and Rebekah Wade, deputy editor of the Sun took over editorship of the News of the World after Phil Hall quit his position.
British advertising giant WPP confirmed its takeover of US rival Young & Rubicam, creating the world’s largest advertising group while ex-Loaded editor, James Brown announced his plan to float his new publishing company, IFG, as it unveiled its first title, Hotdog.
Virgin Radio was given a £75,000 fine, the largest ever imposed by the Radio Authority, for breaching impartiality rules in a broadcast during the London Mayoral Elections. The broadcast by Chris Evans went out nationally and locally and therefore could have earned a fine of up to £1m, 5% of revenue gained from advertising and sponsorship.
June
Publishers began to recognise the growing need to be media-neutral in the digital age, shifting their operations to concentrate on brands and core markets. IPC changed its name from IPC Magazines to IPC Media, reflecting a new focus on media brands and defined five core markets within the company: Women, TV, Home and Garden, Leisure and Men’s Lifestyle & Entertainment, following a similar strategy by rival Emap.
BSkyB, NTL and ITV emerged as the winners in the battle for Premier League broadcasting rights. The BBC lost the right to televise highlights of the games to its commercial rival ITV. The Corporation fought back, however, and later in the week secured the live rights to the FA Cup and England Internationals, thus saving its flagship highlights programme Match of the Day. The audience showed which broadcaster they preferred during the the crucial England/Germany Euro 2000 match, broadcast by both ITV and BBC. Sixty-six per cent of football fans tuned into the BBC’s coverage of the game, even without Des Lynam.
Another spate of mega-mergers marked the month with Saatchi & Saatchi agreeing to be taken over by French advertising group Publicis in a deal which will see the creation of the world’s fifth largest advertising company and merger plans between Vivendi, Canal Plus and Seagram were unveiled, leading to the formation of a media giant to rival that of AOL-Time Warner.
The Independent Television Commission (ITC) told ITV to move its Nightly News programme to an earlier slot after it “unanimously rejected” the network’s proposals to improve audience figures for its evening news output. The regulator told ITV it could not accept its suggestions for additional investment in the 9pm-11pm peaktime period unless it scheduled its 11pm news programme at an earlier time, kicking off a fight which was to last all summer.
July
July saw the battle between the ITV giants finally resolved. The Department of Trade and Industry‘s approval of a merger between any combination of the big three ITV companies effectively abolished the convention limiting the amount of net advertising revenue controlled by a single company to 25%. The deal between Carlton and United News and Media wavered, and eventually Granada and United settled it, leaving Carlton to pick up the results of divestment necessary for the deal. ITV as a whole remained locked in battle with the ITC over the retiming of the News at Ten. The ITC decided that the bulletin had to be returned to its original slot – ITV responded with a request for judicial review. Over in radio, Capital increased its potential audience to 58% of the population, with the purchase of Beat 106 for £33.75m.
United News & Media‘s new media division, Xilerate, held its first conference, which touched on the subject of websites for the younger generation. Children became the new focus for websites as UNM’s plans for sub-club.com were unveiled and Freeserve‘s mykindaplace.com launched. Meanwhile women’s sites, the previous ‘next big thing’, showed signs of struggling, as, less than a year from launch, ANM’s Charlotte Street and Freeserve’s iCircle announced re-jigs, with Charlotte Street bringing in a new editor.
BSkyB continued to embrace future technologies, increasing its stake in digital shopping platform Open to a controlling one, and reporting a record high in digital subscriptions as it removed more of its analogue services. However, the cost was counted as financial results revealed losses.
Gannett and Johnston Press’ rival bids for RIM were referred to the competition commission, only to be joined in the battle by Guardian Media Group. IPC looked to be eyeing Best publisher Gruner & Jahr for a takeover, but was pipped to the post in a surprise move from Natmags, which ventured into weeklies for the first time. CondéNast announced that it is to import the successful US women’s glossy Glamour into the UK in Spring 2001. By the end of the month it had one less rival as Eve Pollard’s Parkhill Publishing bit the dust, taking older women’s monthly Aura with it.
August
As the process of consolidation got underway at ITV, the Trends in Television report brought the unwelcome news that its audience share had slipped below the 30% mark, calling the high price of advertising airtime into question again. The independent broadcaster’s request for a judicial review into the ITC’s demand that it reinstate the News at Ten was further complicated when the BBC threatened to throw a spanner in the works by moving its 9pm bulletin on BBC1 into the 10pm slot.
The TV watching public were more interested in what was happening on Channel 4, however, as TV’s event of the year, Big Brother, gained momentum. Guardian Media Group decided to sell its share of Endemol, the company which created the interactive show, while the volume of media hype, phone votes, web traffic and viewers increased. Nasty Nick’s outing proved a high point for C4, with 5.5m viewers – a 46% share- forming the largest audience for the channel since the 1995 screening of Four Weddings and a Funeral.
National commercial radio listening took at dive in the Rajar figures, with the BBC’s Radio 1 and 2 holding onto the largest average weekly audience and largest share respectively. Over at the Beeb’s commercial division, BBC Worldwide, the corporation’s first women’s glossy, Eve was launched, containing copious plugs for BBC products. A themed future was unveiled for BBC TV channels, including more entertainment for 1, more factual for 2, and Choice and Knowledge becoming BBC3 and BBC4, covering youth and Radio 4 listeners. Accusations of dumbing down flowed both freely and inevitably.
The new buzzword in research was Tweenagers – pre-teen, post-primary school creatures with finely honed powers of parental persuasion and pocket money to burn. A raft of new titles including Emap‘s Elle Girl, whose imminent launch was announced this month, are expected to target the market in future, as ABC figures revealed Emap’s grip on the teen market was slipping and that the women’s glossy market in general was in decline.
September
September saw ONdigital launch ONnet, offering full internet services via the television. Research showed that those putting content on the web were missing the boat when it came to ‘Silver Surfers’ (post-retirement web-heads). This group are learning to explore the net at a faster rate than their younger equivalents, thanks to the time on their hands, but are not being served (or exploited) by websites. Big Brother proved to be as big a hit online as onscreen, with the office-workers’ favourite skive site of the summer going straight into MMXI‘s top ten web destinations for the UK.
Despite having shed its pantomime baddy, Big Brother kept TV audiences hooked to the last, and recorded Channel 4’s largest ever Friday night audience when an average 7.5m or a 30.8% audience share tuned in to see the penultimate eviction and an average 9m or 46.5% share watched the later show which revealed the winner.
Meanwhile, the TV powers-that-be were enacting their own dramas, with Elisabeth Murdoch breaking free of her father’s empire to take on a non-executive directorship at magazine publisher Future, while BBC1 got its first female controller, in the form of Lorraine Heggessey. ITV’s latest hope for a new occupant of the long deserted chief executive’s office gave an emphatic answer: J Walter Thompson’s Stephen Carter accepted a position at NTL instead.
Some consolation came for ITV with the resolution of the News at Ten conflict. An agreement reached with the ITC means the bulletin will return to the earlier slot next year, but only on certain nights, with a sweetener of increased advertising minutage. More immediate change was apparent at the Daily Telegraph, which unveiled a new look; at Trinity Mirror, where management was reshuffled; and at Natmags, where a new, brands-oriented structure incorporating recently acquired Gruner & Jahr titles was unveiled.
Talksport‘s rarely reticent chief Kelvin MacKenzie stirred up emotions at Rajar by condemning its diary system of audience measurement as outdated, inaccurate and unfairly biased towards larger stations. Rajar hit back in defence of its methods, saying they were “highly respected worldwide”. Acrimony on a more personal scale was the inspiration for two magazine launches during the month. Divorce and Vive (the latter of which had to change its original title of New Era after a religious magazine of the same name was found to exist already) offered a refreshing and realistic aid to modern life, or a sad and cynical reflection of our time, depending on your point of view (and marital status presumably.)
October
Just as the News at Ten furore seemed to have died down, the BBC announced, with two weeks notice, that its own evening news would move to the slot. ITV’s news will not move back until next year, but this did not prevent a ratings war ensuing, to say nothing of renewed calls for a single broadcasting regulator. Meanwhile predictions of an advertising slowdown at ITV continued, Granada sold HTV to Carlton, at the same time consolidating its ownership of lucrative southern franchise Meridian, and David Elstein quit Channel 5, leaving the way clear for his successor, Dawn Airey.
Having succeeded in winning the rights to screen 40 Premier League football games a season on pay-per-view, NTL failed to reach a satisfactory agreement about the details, and withdrew from the £328m deal. The first England international pay-per-view game against Finland attracted criticism for broadcasters U>Direct and fuelled fear in the industry that NTL had been expected to pay too much for the Premier League rights, which are expected to be offered for tender again at a lower price.
Suitors for the Express group of newspapers gathered in increasing numbers. The Barclay Brothers having apparently been rejected, another set of entrepreneur brothers, the Hindujas, put their hat in the ring, along with a conglomerate including ex-Mirror man David Montgomery, the Daily Mail and General Trust, and the Telegraph group, who were all thought to have submitted bids, but remained in the dark as the month ended.
November
The middle of November saw a shock to everyone, not least Middle England, as the Express group deal was clinched by OK! publishers Northern & Shell. Owner Richard Desmond was almost universally dubbed “Porn King”, thanks to Northern & Shell’s other titles, which include top shelf material Asian Babes and Big and Bouncy, while indignation came both from other bidders who were perplexed at being passed over, and occupants of the moral high ground who were concerned that a porn publisher could run a national newspaper of the Express’s long and until recently auspicious standing. Desmond claimed that he would not interfere with editorial arrangements, but many staff were sent on their way with or without large cheques and a grim faced Rosie Boycott is thought to be entrenched for battle.
A January launch date was set for E4, Channel 4’s digital entertainment channel, which secured carriage on NTL during October. Dawn Airey began her term as Channel 5‘s new chief executive with a round of promotions as her management team was assembled and both Sky and NTL announced that digital subscriptions were up, but that financial losses were also on the increase.
Who Wants To Be A Millionaire? finally gave away the jackpot one Monday in November…the same Monday that Victor Meldrew finally brought both feet into the grave. Undignified accusations of a fix from the BBC and One Foot In The Grave actor Richard Wilson ensued and were denied, despite the fact that a leak, of which ITV denies all knowledge, meant that all the newspapers spoilt the Millionaire surprise and guaranteed the 13.9m audience. Victor’s shuffle off the mortal coil at the hands of a hit and run driver only managed 10.7m.
The financial horror story of the month occurred at Future Publishing. Having investigated a rather weighty accounting error at its French subsidiary, the company issued a profits warning, which sent share prices into free-fall. By the end of the month they had dropped from their pre-warning price of just under £5 to well under £2.
December
This was the month when the wait for the Communications White Paper finally came to an end. In anticipation of a relaxation of ownership restrictions SMG bought up 14% of Scottish Radio Holding‘s issued share capital, sending Scottish Radio shares rocketing. SRH advised their shareholders to sit tight while Goldman Sachs reviewed their options, then the White Paper was released, with the news that the radio ownership points system was on the way out…but details of the new system were unclear and left radio owners feeling uncertain and let down. Not so the independent TV franchisees, for whom the way looks clear for consolidation into a single ITV. These new arrangements will be watched over by a single regulator, Ofcom, which means goodbye to the ITC.
After the White Paper SMG increased its stake in Scottish Radio to just over 20% and by the end of the month a variety of suitors were circling in anticipation of a full takeover. Vultures were circling over the 70-odd year old remains of music mag Melody Maker as IPC announced its demise, the popularity of non-guitar based music and music news carried on the internet having proved too much to bear. Parts of the title will live on in the NME.
The end looks nigh for the Express web ventures, which were sold to a merchant banker for just £1 by their new owner, Richard Desmond. Things were looking better over at Trinity Mirror, where icshowbiz.com, a music and entertainment site with large-scale, European ambitions went live. At UNM, a new business focussed approach is on the cards, with a new name – United Business Media – to go with it. New media division Xilerate is to be a casualty of the sweeping change.
One of the promises of the White Paper was internet access for all by 2005, but research released during the month suggested that the net was not having the huge impact on peoples lives that was first imagined, while the Office of National Statistics reported that, despite the percentage of UK residents with online access at home reaching over 30%, the ‘digital divide’ is widening, with the elite emerging for reasons of age, geographical location and income bracket.
Back in the tangible world, slowing ad revenues were setting alarm bells ringing. News International was said to be embarking on a belt-tightening exercise across all its national titles, while Carlton announced that while its profits were up, its ad revenues were sinking. ITV ad revenues may improve if the channel finally sorts out carriage on the Sky Digital platform, a move which was promised ‘soon’. It could be joined on the digital platform by a new BBC sports channel, which would be launched in co-operation with a commercial partner.
The sensibilities of the British public had to endure a lot during 2000 – Keith Chegwin’s naked game show on Channel 5, Marks & Spencer’s generously proportioned naked lady on a hillside, Nichola from Big Brother in her leopard skin G-strings – so it perhaps came as no surprise when the final offensive advert of the year proved the last straw and clocked up more complaints than any other for five years. Yves Saint Laurent’s picture of a naked Sophie Dahl in suggestive pose was probably reproduced more times in newspapers writing about it than in the actual posters, which prompted more than 730 complaints. Whether anyone has gone out and bought the product – Opium perfume – because of it, is anyone’s guess, but the ASA ordered the withdrawal of all the outdoor examples, and YSL may now face up to two years of pre-vetting for future campaigns.