Connected TV Experience: Simon Daglish on ITV’s pay TV strategy

The “Business Models and Platforms” panel at MediaTel Group’s first Connected TV Experience conference reached near consensus that channel brands will remain key – acting as the ultimate content recommendation engines. As consumers become confused by the choice in the digital TV arena, trusted channel brands will continue to have an important role to play.

But where does this leave free to air broadcasters, which risk seeing advertising revenues falling? Simon Daglish was fairly tight-lipped about ITV’s pay TV strategy, which should come into play in the next 18 months. Although he did say that content will have to be “bloody good” for consumers to pay for it. Not just behind the scenes or out-takes he made clear.

“We need to work with advertisers and customers to formulate the best way to monetise the TV landscape and provide a better experience than we already do,” the ITV group commercial director said. “The vast majority of our business is still the 30 second spot – it is working extremely well at the moment. You just have to look at the latest Yeo Valley ad during The X Factor… it drives interaction rather than cannabalises it.”

Referring to the future as a “mixed economy”, Daglish re-iterated that ITV’s strategy is to see 50% of revenue generated from advertising and 50% from “other forms”, which will include selling content, though he admitted the UK audience is “used to everything being free”.

“If we were to go for a micro-payment option, content would need to be at such high value – something consumers can’t get anywhere else – and delivered in a way they haven’t currently got access to,” he said.

When asked whether ITV’s strategy will include allowing consumers to pay to access a future episode – say next week’s Downton Abbey – Daglish said the broadcaster was “looking into it… we can’t dismiss it, or anything else – there are so many things on the table”. Graham Lovelace, a fellow panellist, was quick to dismiss this particular opportunity – “I can tell you it won’t work.”

In 18 months, we can expect to see ITV’s pay TV strategy emerging, which will start off on a small scale at first, Daglish confirmed. “We will make mistakes on the way and we will learn from them,” he said.

He admitted that the new landscape is far from easy for the consumer. “People are confused by the array of what is out there. They rely on brands such as the BBC to decide for them – to pull the best content,” he said. “Viewers want it to be easy, which is why channels one to five get the bulk of TV viewing. For brands going forward, it is an important area… we dismiss that at our peril.”

See also:
Tinie payments; Dizzee Times
ITV results: Encouraging progress but remain cautious