Raymond Snoddy: Media 2016
There may be trouble ahead – and precious little moonlight, music or romance, writes Raymond Snoddy.
Top of the troubles list for media in 2016 is that the Government, fresh from its triumph of cutting £100 million from the flood defence budget, will continue trying to undermine a large swathe of the British television industry for almost random reasons.
At the same time the level of international recorded and library video, and the intensifying efforts of the global communications giants such as Google and Amazon, will continue to rise perceptibly, albeit it from a relatively low level.
As for publishers, well the old problem remains to be solved this year as in previous years: how to stop the slide in the circulation of printed newspapers which bring in the bulk of the revenue, before the yield of online can be expanded to compensate for the apparently inevitable decline.
If that’s not enough of a challenge then stir in the disruptive impact of programmatic advertising and ad blocking and then it’s a case of Happy New Year to one and all.
Luckily things might not turn out quite so bad in the Year of the Monkey. After all, as the Chinese like to say, monkeys are quite clever animals but the only safe prediction is that media executives will earn their salaries in 2016.
The biggest threat the British broadcasting system faces is Culture Secretary John Whittingdale, or to be more precise Whittingdale’s enthusiasm for the privatisation of Channel 4, which would be an act of extraordinary, pointless vandalism.
Of course you can privatise anything, collect a one-off fee of perhaps £1 billion for the Treasury – peanuts in the greater scale of things – and retain a commercial television channel.
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What you cannot do is privatise and preserve the current Channel 4 remit, its traditions, culture and role at the heart of the UK independent production system.
The likely outcome would be a transfer into US ownership of the legislative creation of Lord Willie Whitelaw who was a wiser and cleverer Conservative by far than John Whittingdale.
Comcast-owned NBC Universal has denied it is in talks on an ITV takeover but there is no shortage of potential US predators, not least Virgin Media owners Liberty Global or Time Warner.
Unless Whittingdale is vigorously opposed it is entirely possible that by the end of this year all of the UK’s three main commercial television channels could be in US ownership.
This could be relatively benign, but the US majors march to a different drumbeat; the public service broadcasting tradition in America exists at the margins and the lack of reciprocity is more than a little galling. British companies are forbidden from controlling US networks even if that were financially feasible.
The markets will decide the ultimate fate of ITV but Channel 4 can be saved from privatisation – but only if there is a vigorous all-industry campaign to expose the folly of Whittingdale’s ambitions. Ridicule is always a deadly weapon to turn on politicians who take themselves ever so seriously.
If the mood music is correct Whittingdale has had his hands removed from the neck of the BBC and a “deal” has already been done with Chancellor Osborne.
It’s not much of a deal, and instead of encouraging and expanding one of the few industries where the UK is world class, the Government will be inflicting more job losses and service cuts on a British institution famous around the world. But the situation has the smell of a fait accompli about it.
As for Netflix, Google and Amazon, consumers will exercise their right to watch whatever they want but their gains in viewing share will be gradual at best. Time is finite and broadcasters will only have to worry seriously if they no longer command the majority of viewing time – something that is not even close even among younger demographics.
Last year there were signs of newspapers regaining a bit of lost confidence and being up for the fight rather than succumbing to a sense of perpetual gloom. The overall impact of newsbrands in all their manifestations with growth in mobile to come has never been higher, and research has helped to emphasise the superior commitment, time spent and engagement with printed newspapers.
Certainly it was research that persuaded the WPP chief executive Sir Martin Sorrell to reappraise his attitude to newspapers last year. Where Sir Martin goes, others can surely be persuaded to confront the bleeding obvious. There must be some sort of rationale behind the choices of the marketing community.
National publishers have on the whole, after a period of flux, sorted out their attitudes to charging for online. With the obvious exception of The Guardian, which is required to survive without making any particular rate of profit, subscription or hybrid versions thereof is the preferred choice at the top end of the market.
The liberation of The Sun from its paywall straitjacket confirmed the wisdom that mass-market papers benefit from the widest possible reach. It goes with the territory and it was always a mistake to try and swim against the stream.
The Guardian, which remains committed to the mainly free online model, has however hit on a concept that could create significant streams of revenue in future. It is that newspapers by their particular character bring together collections of like-minded individuals who can be offered membership of the club with associated privileges and relevant and lucrative live events.
It is at least part of the possible path to the future and greater priority for – and promotion of – print, and would be rational given the lion’s share of revenue it still produces for publishers.
The research that helped to rehabilitate the marketing reputation of newspapers has also raised serious questions about programmatic. What exactly are advertisers getting for their money? How often is it a flash of ankle or a relationship with a computer robot?
Ad blocking could represent more intractable trouble but the ancient verity that there is no such thing as a free lunch should help. Why should consumers get expensive content without lifting a finger to help pay for it?
There may still be tear-drops to shed but it’s now time to face the music and dance.