Last week’s reports that cable operator Telewest was in talks with magazine publisher IPC are the latest in a long line of suggested tie-ups between so-called “content providers” and media companies.
The process began in earnest with AOL’s purchase of Time Warner earlier this year, a move which contributed to the eventual downturn of new media stocks on Wall Street, as it persuaded analysts to start valuing Internet stocks in the same way they value old economy stocks.
Nevertheless, the technology companies have launched headlong into the world of “content” – seeking out film, TV programmes, news, sport and music. This has fuelled further speculation that Yahoo! is circling EMAP.
Nowhere is the need for audience-pulling content greater than in the world of cable TV. Having invested &£20bn in building cable networks across the UK, the cable companies need to give consumers a strong reason for signing up to the range of new entertainment services.
There is a crisis facing media owners. They are investing heavily in building these new “gas pipelines” before they have discovered the gas to put down them. There simply is not enough content that people want to watch to justify the explosion of media channels expected over the next decade. In short, it would appear there is not enough creative product to justify this growth.
BSkyB chief executive Tony Ball pointed to this sad – and costly – fact earlier this month at a Royal Television Society dinner. He said the TV industry was failing to provide programmes that “innovate, challenge and inspire”.
He attacked broadcasters for failing to accept new ideas and called for a change of attitude among those who commission programmes and said they should “applaud people prepared to take risks.”
Of course, the same charge could be levelled at Sky, as people sign up for the service mainly to access Premier League football games and films. But Ball has certainly touched a nerve. There is precious little that people want to watch on existing channels, and when there are 200 TV channels, there will not be enough attractive programming to fill them.
Technology companies such as Telewest have woken up to the idea that to get a return on infrastructure investment they must provide the films, programmes and news that people want to watch.
Merrill Lynch media analyst Neil Blackley says media companies should follow what he calls a “golden triangle” strategy. “In the consumer area, a Golden Triangle would involve a generic channel or masthead programme, a specialist magazine, and related online community/vertical portal website… Mergers of leading TV and magazine companies could make a lot of sense.”
If only it were that easy. There has been little successful use made of “masthead TV”, where magazine titles are turned into television programmes. OK TV is one of the few successes, but the masthead explosion is still waiting to happen.
So it appears that media companies may be thwarted in their ambitions to provide a strong draw for consumers to take up the new technology. Football drove take-up of Sky, ITV has built a schedule around Who Wants To Be A Millionaire? and Channel 4 certainly has a hit with Ali G. But it is not enough. There is a voracious appetite for more watchable programmes, and it is hard to see how TV producers will come up with the formats to sustain the hundreds of new media channels.
Peter Bazalgette, creative director at GMG Endemol Entertainment, and one of the UK’s leading television producers, says this argument is a curious way of viewing the new media explosion.
Bazalgette points out that William Caxton, who brought the printing press to England in the late 15th century was not put off by the fact that there was only one best-seller that people wanted to read -the Bible. It was 300 years before the likes of Dickens brought about an explosion in the novel, says Bazalgette. But Liberty Media, which has bankrolled Telewest and Flextech’s investment in cable and TV, is unlikely to be prepared to wait that long.
Technology is chasing content
Responding to Ball’s criticism of the UK television industry, Bazalgette says: “It is fine to take Ball’s attitude, it should provoke creatives to come up with ideas. Actually, we are very innovative. People used to say there are no new ideas, but now there are so many new ideas it is very exciting, such as Who Wants To Be A Millionaire? and Whose Line Is It Anyway?
“I’ve got 60 to 70 deals in 30 territories for programmes such as Ready Steady Cook, Ground Force, and Changing Rooms. These are all innovations that have come in the second half of the Nineties.”
But he concedes technology is chasing content. “We invented TV, then had to invent the programmes to go on it. With multichannel and online, technology is driving it. Content has to catch up,” he adds.
It is not just TV programmes where supply is outstripping content. There is a severe shortage of blockbuster Hollywood movies to draw in the viewing crowds – both to the TV channels and the cinemas. In the US, ticket sales fell 0.7 per cent last year, after 1998’s attendances were boosted by Titanic. But one three-hour blockbuster every two years is hardly enough to
fill new channels. Media buyers have attacked ITV for its failure to secure the rights to big films with which to fill its peaktime schedule now that News at Ten has been axed. Immediately after overhauling the schedule, ITV screened a series of James Bond films. But since then, it appears to be taking a safer option of producing its own drama, appealing to older audiences. Channel 5, meanwhile, has struck a deal with Unilever’s library of Columbia Tristar films, giving it access to a wide range of films.
Need to entice youth market
Pedro Avery, head of TV at media agency Booth Lockett Makin, says: “ITV can’t afford to buy the films. Sky, BBC1, Channel 4 and 5 have got exclusive movie deals which restrict ITV’s access. To bring in the young audience, you’ve got to have film and sport, and it is hard to see where it will get the movies. If it buys one Star Wars, it will have to buy a package including 15 other productions as well.”
The lack of big new films is driving up the price of the few really attractive movies, and putting them out of the reach of many channels.
The music industry is also afflicted by a lack of big new acts coming through, with the attendant films, live shows, video clips and other material with which to entice the masses onto the Net and cable music channels.
Simon Pickens, a former music business manager who is now managing director of Net broadcasting channel DVTV, says: “You can’t have a powerful music market all the time. The music business works in cycles. Now you have got a lot of mediocre artists, you don’t have the major stars. Gary Barlow was pushed significantly when he left Take That, but he didn’t turn into another George Michael.”
He points to “Britpop”, which he says was created by middle-aged music business barons as a way of packaging a sound to sell in the US. “But the Americans said ‘no thanks,'” he adds. The biggest sellers in the music business are still artists who rose to fame in the early Eighties, or even the Seventies.
So until creatives come up with the goods, the media companies are going to have a long, hard sell to hook in the punters and recoup their investment. Perhaps the industry is sowing the seeds of its own destruction, hooking the young on homogenised, dumbed down culture such as computer games, McDonald’s and wall-to-wall TV.