Channel 4, which this week unveiled record profits, is set to introduce its long-awaited video-on-demand service this year as it looks to new media and multi-channel offerings to sustain growth.
Speaking exclusively to Marketing Week, C4 chief executive Andy Duncan says he is committed to on-demand and multimedia services, and predicts that within a few years “at least one-third and possibly half” of viewers will watch most programmes on-demand or time-shifted. “The strategy is designed to [migrate] Channel 4 from a single analogue channel to a multimedia company, capable of delivering its public remit via whatever platform audiences choose,” he says.
Four On Demand will run across broadband and cable channels in four “strands”: commissioned programming; the best of acquired shows; music; and a Film Four channel with content to buy or rent. The broadcaster will also develop its internet-only offerings with customer-generated content.
SG Securities media analyst Anthony de Larrinaga says the trend is set to grow, with broadcasters wanting to leverage proprietary content across as many platforms as possible. But ZenithOptimedia TV broadcast director Chris Hayward, warns: “These are positive developments, but we need to recognise what the opportunities represent and how to take advantage.”
ITV is also said to be developing on-demand services, while the BBC is testing an interactive player allowing people to view seven days’ programming on demand. MTV recently launched its online on-demand service Overdrive in the UK, and says it will bring in services for Nickelodeon and Paramount Comedy (MW last week).
Duncan is adamant that broadcasters who do not act now will be locked out of a future new media world. He says C4 was late to multi-channel, with the launch of E4 in 2001, and wants to ensure it stays ahead. “At the moment people watch 24 hours of TV a week. In five years’ time people will still be watching about that much, but in different ways,” says Duncan. “The vast majority is currently linear scheduled: people watch what we choose, when we choose. But a greater share of what we watch will be on-demand or time-shifted.”
The ongoing convergence of TV and telecoms brings threats, such as piracy and illegal downloading. Analysts have compared the threat to the explosion of pirated music download in 2000, and Duncan says TV must be quick to introduce standards and common practice to dissuade people from downloading illegally. This, and Four On Demand’s launch date, is dependent on broadcasters settling with producers’ body PACT on how TV and new media rights can be exploited.
Duncan also warns of global competitors enforcing their presence, with some established powerhouse brands fading. Recent plans from companies such as BT and BSkyB to launch internet protocol TV mean more customers can access interactive and on-demand functionality. Google, Yahoo! and Apple are also introducing broadband video players.
C4’s annual marketing budget has doubled to &£50m since Duncan started. He says: “Marketing by broadcasters is rising rapidly and we are all having to become more consumer-facing and competitive.” The C4 brand – which he says became confused under his predecessor Mark Thompson – and the positioning of its channels hold the key to its future. However it is viewed, C4 must use the brand as a point of difference to drive viewers.