FT Digital Media & Broadcasting Conference: Gerhard Zeiler talks shop
RTL Group’s CEO Gerhard Zeiler took to the stage at the FT Digital Media & Broadcasting Conference yesterday to discuss the impact of the recession, consolidation of TV channels, VoD opportunities, Apple’s iPad, the BBC’s strategic review, and what he thinks of current TV landscape.
2009 was the television industry’s “worst nightmare” with a downfall much worse than expected, Zeiler said. However, in hindsight he is much more optimistic about what the recession has meant for the market.
The recession forced the television industry to “do its homework” last year, which involved cutting costs, becoming more efficient, taking a huge step towards digital, and adopting a new cautious approach (ie not being as reliant on advertising), according to the CEO.
“2009 wasn’t such a bad year after all,” he said. In times of crisis, he believes broadcasters worked together to win back market share, which has its “advantages”. Now, the new landscape has made for an “interesting end game”.
In terms of going forward, Zeiler claims there will be consolidation in the commercial market, which he says is made up of “too many players”. “There are several possibilities but the UK is still very influenced by the government (ie Digital Britain) so it’s not clear what shape [consolidation] will come in,” he added.
Zeiler is positive about the possibilities video-on-demand offers the market – the opportunity to optimise the core business, offer more special advertising formats, cut costs and increase efficiencies. “In order to secure future growth [the market] has to do something else (ie VoD),” he said.
Although, he is realistic about the monetisation value of non-linear TV. The majority of TV viewing (60-70%) is still via linear television, which means non-linear offers less value.
In terms of payment models for online catch-up TV services, he says people will always choose the free option, even with advertising, if given the choice. However, he also believes that consumers are willing to pay for content, if it’s good.
When asked about the much-talked about iPad, the Channel Five boss said it offers an additional opportunity to exploit content. Although he said there was a “need to make sure aggregators don’t go from one place to another to get it cheaper”.
He added that new devices and services made the need for both channel and programme branding to be stronger than ever, but also promised that creative decisions would not be based around what can be monetised on new products.
Looking at programme formats, Zeiler said the last 10 years has been “an incredible period for new formats” with reality TV shows such as Big Brother and The X Factor, which reach mass audiences. He forecasts that the next five years will see prime time local fiction return to European line-ups.
On sponsorship, he believes its a good tool to combine an industry need with creative expert but said it plays a lesser role than people think. When asked whether product placement will become the new income stream or just a slice of the same pie, Zeiler shrugged. “Product placement is a way of life whether we want it or not, so why not make it part of the funding model? Again, it will bring revenue to the table but not as much as some people say,” he said.
And finally, without being able to escape the BBC debate, the RTL head said that “either government will want something from the BBC”, although he doesn’t know whether the corporation’s latest attempt at an overhaul “will be enough”.
From a competitor point of view, he’d like to see the review include more things. “The BBC is very powerful and it’s position is not in danger. Whatever happens, it will still dominate the market,” he said. “This discussion is necessary though, especially for the commercial sector”.