Barcelona exposes digital TV vacuum

TV Barcelona was billed as a talking shop to discuss the ways digital and interactive TV will change the economics of, and way we consume, the world’s most popular medium.

In fact, the conference was dominated by discussion of a network that began almost half a century ago – ITV.

Managing directors, marketers, media directors and advertising heads all came to take the temperature of the largest TV network in the UK. All the talk in the bar of the Hotel Arts, and much of it on the conference floor, revolved around the channel’s progress. Only those paid to evangelise on behalf of new media affected indifference. However, they, like everybody else, trooped in to a packed auditorium to hear ITV chief executive Richard Eyre run the rule over his network.

The problem is that the contenders to ITV’s heavyweight crown barely rate as featherweights.

Cable & Wireless Communications director of marketing Janet Somerville said that the cable company would launch a TV and home shopping service later this year. However, she could not fill in the details on what services and programming the system would carry. She added nothing to answer the questions that hang over cable’s digital offer.

Microsoft Web TV UK manager Bruce Lynn showed the conference more about the future than CWC, but left them cold. He demonstrated a system that works on either TV or PC. It mixes TV, the Internet, computer games, and electronic programme guides. This system is being used in 1.5 million homes in the US, and is on trial in London, Liverpool and Blackpool in the UK. However, it is clunky, slow, and extremely complicated.

In Hong Kong a similar system, which also uses Microsoft technology, is run by Hong Kong Telecom. Launched last March, it predicted it would have 250,000 subscribers paying 31 a month each year. It actually has 80,000 paying 21 for a system that costs over twice that to run.

The complexity of the system was in evidence in Barcelona. After Lynn finished his presentation, not a single delegate could think of a question to ask him. His speech concerned how TV might be decades from today.

Of the newer stations, only BSkyB has been able to make any sort of impact. But it plays a different game to ITV. It makes its money not by ratings which are sold to advertisers but by selling its services direct to the consumer through subscription and pay-per-view.

Advertisers, understandably, wanted to know how any of this was going to help them sell more of their products. While some advertisers felt they should be at the forefront of new media, many others felt they were being pushed into it because their competitors had dabbled in it, or to gain PR coverage. A Heinz Baked Beans Website, for example, allows expats to order the product wherever they are in the world.

However, when someone from the floor said Heinz is just the sort of large company that should be pioneering digital media, Heinz general manager for corporate marketing of European groceries Eric Salamon pointed out: “My job is to flog beans and ketchup, not to lead new forms of media. It’s difficult to see how interactivity is going to work with a can of baked beans.”

The two sides of the advertiser debate were exposed in the automotive industry – with Vauxhall marketing operations director Andy Jones and Toyota’s UK marketing director Mike Moran taking opposing views.

Jones thought that experimenting in new media was essential to talk to young people in their own language before they grew into buying cars. Moran, on the other hand, said that the average age of a new car buyer is 42 and they respond to communication through TV or other forms of traditional media. On balance, at this conference, Moran’s view was in the majority with advertisers.

Kimberly-Clark European media director Oliver Cleaver backed this view. He argued that fragmenting audiences only put the mass market at an even higher premium.

He cited the 355,000 advertisers in the US are willing to pay for a 30-second spot during hospital drama ER as an example. For packaged brands, he argued, it is not about who is watching, but how many.

And this, ITV network chief Eyre knows, is his trump card. He and his senior team programme director David Liddiment and marketing director John Hardie have made great strides this year to boost the figures. The channel’s share of viewing is up 2.1 per cent over the past 12 months, its peaktime share fluctuates between a healthy 38 and 48 per cent.

But seeing how mass audiences are so vital, makes you wonder how many advertisers would have carried out their threat to leave ITV had the team not arrested the channel’s slow decline. Even a weak ITV gives coverage and reach that is unparalleled not only in any other medium but in TV as well.

Eyre said: “All ratings are not the same. Big ratings do more. People watch big shows in groups and talk among themselves about the programmes and the ads. Niche shows tend to be watched by individuals.”

He added: “The mark of a great company is that it exceeds its customers’ expectations. That is what we intend to do.”

The audience loved that as much as they loved the improved figures ITV put out last year. The bright young things in new media will have to work harder than they thought if they are to bury ITV.

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