When the media going gets tough the tough get dirty

Increased competition is to blame for TV’s phone-in scandals and the growing furore over the distribution of free papers in the capital

In my 30-odd years in media, I can’t remember a time when so many media owners have been subject to so much investigation. To boot – some broadcasters have generated significant mistrust among their viewers and the two London freesheets among their advertisers.

We’ve seen, for example, the BBC fall foul of fair viewer competition on Blue Peter by hauling an amazed child visiting the studio on to a phone to pose as the winner of a telephone competition, not to make money, but under the mantra of “the show must go on”.

The almost weekly scandals in commercial TV are all about making money at the viewer’s expense. I don’t know the exact amount being made by incorrectly/ incompetently, some would say fraudulently, run telephone competitions but I can make an educated guess and it runs into tens of millions a year. It wouldn’t knock me over with a feather if it reached £100m.

This is roughly how it works/ run a competition on air, make the questions ludicrously easy, keep plugging it on air and, hey presto, loads of people ring in and as there are virtually no costs, revenue broadly drops to the bottom. Even more money is made if the telephone operator closes the competition before the lines close, in the case of Opera, GMTV’s now ex-operator, up to halfway through the competition, so about half of the callers had no chance of winning. By any measure this is an outrageous abuse of viewer trust..

Do I believe that the management of ITV or Channel 4 with their star turns Richard and Judy or GMTV knew or in some way were colluding with their respective operators? Or, from a governance perspective, were flouting Ofcom’s code of practice? Happily I can say no. But as phone-in revenue is easily obtained and has been increasing, while advertising revenue is neither easy nor growing, I suspect no one was over watchful. Let’s face it, would you want to be the TV executive who killed the goose that lays the golden egg? 

Turning now to the ferocious war that’s happening on the streets of London between Associated Newspaper’s London Lite and News International’s thelondonpaper. At its heart this is a story about an over-supplied market and two determined and ultra successful proprietors – Lord Rothermere and Rupert Murdoch who seem at ease with any tactic that puts the other out of business and in my view are paying little to no attention to the advertisers who are part-funding this dirty and futile war.

So what we’ve seen is Associated circulating footage that allegedly shows thousands of copies of thelondonpaper being dumped by distributors. I watched the Panorama programme that covered this and it was truly gobsmacking. News International has hit back by stating that it too has photographic evidence that London Lite’s distributors are also dumping and it says it has sent this evidence to Associated. This may be true, but so far I haven’t seen these photographs. I may not have the credentials of the former Scotland Yard DI who supervised Associated’s secret footage, but I did do my own little piece of research on the night of Monday, April 30, and caught the Tube from Goodge Street to Tooting Bec.

In my carriage there were at least 50 thelondonpapers. I don’t believe for one moment that they all found their way there in the hands of 50 people. To me they were obviously dumped, which poses the question how did they get there, because neither paper has distribution rights on the underground. The good news is that about ten were read and I read one. Whatever the absolute truth, all this does is to confirm my suspicions that there are nowhere near 902,370 combined copies of these newspapers finding their way daily into the hands of individual Londoners and being read. Given that it took Metro eight years to reach an audited distribution of 547,180, it is difficult not to conclude that 900,000-plus is bollocks and that the market is saturated.

It is clear that there is major duplication of advertising between the two papers, so why are most advertisers seemingly blindly paying for this duplication? To date, 63% of the advertisers which have appeared in thelondonpaper have also advertised in London Lite. Call me old-fashioned, but that is a big gamble for the £8.5m of advertising money committed to both titles so far.

So what does all this say? There are at least two common strands. First, in both cases the media owners are out-sourcing – broadcasters to telephony companies and the newspapers to street distributors. The former for the obvious reason of specialist services and the latter, I assume, due to fixed labour costs. Any of us in business know that the minute you out-source you have to be ever watchful and make sure the controls are checked daily.

The second is what fierce competition can do to even the best of businesses. TV companies are facing the toughest market they have ever seen for ad revenues and new sources of income are obviously tempting. The London freesheets are in a fight to the death – maybe of both of them.

So advertisers beware. And this is before anything emerges about radio competitions and revenue share deals on mobiles.

Christine Walker is chairman of Walker Media

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