Category Archives: raymond snoddy

As the last Christmas decorations are being removed it’s time for a final seasonal tilt at divining the future.
Before next Christmas Rupert Murdoch’s News Corporation will have been given the right to bid for the 61 per cent of BSkyB it does not already own.
Conditions will however be imposed to ensure that Murdoch will not be able to realise the worst fears of his rivals – sweetheart subscription deals for Sky and the News International newspaper of your choice.
Predicting the future has never been an exact science but there is a reasonable trail of logic, instinct and supposition that would take a reasonable person in the direction of such an outcome.
Most of the steps in the chain of argument are so obvious as to amount to truisms.
First, Culture Secretary Jeremy Hunt has absolutely no option but to refer the issue for full investigation by the Competition Commission.
If there ever was any doubt about the matter there can be none now because of pirated prejudices of Business Secretary Vince Cable.
Due process across a decent stretch of time is also the only way of putting matters right given the number of meetings Hunt has had with News Corp luminaries without civil service chaperones and the kind things he has said about the achievements of BSkyB. In retrospect it was a trifle unfortunate that the Culture secretary had said publicly he did not object to such a takeover.
This all happened before the unexploded hand grenade suddenly arrived in his in-tray and before circumstances forced him to become quasi-judicial.
Apart from political perceptions there are many strong reasons why there should be a full investigation. They include the sheer scale of the £8 billion to £9 billion deal and the fact that communications regulator Ofcom believes it should be so.
At the very least there is clearly an arguable case that such a deal should be looked at on grounds that plurality of the media could be threatened.
We should all be grateful to Ofcom for bringing some methodology to examining the issue to help cut through the wails of vested interests on both sides.
Chris Goodall from Enders analysis produced a report looking at the numbers of minutes a day people spent reading newspapers and listening to, or watching, broadcast news.
The Daily Mail accounted for 10.5 per cent of the total less than half the 22 per cent that would be controlled by a News Corp owned BSkyB.
But then on comes the real heavyweight – the BBC – which accounts for no less than 39-percent of all news consumed by Britons.
Such reasoning provides a useful baseline but is a crude counting measure. It mixes up the different media of newspapers, radio and television and does not deal with the subtleties of which news outlets respect basis rules of impartiality and which do not.
Unfortunately for Jeremy Hunt sending the BSkyB takeover to the Competition Commission only buys him six months or so of time – unless he has been promoted to the Business secretary’s job by then.
In most mergers and takeovers the Commission has the final say.
But Cable has left Hunt a final poisoned chalice. Because the initial Ofcom investigation was launched as a public interest issue it is Hunt who will have the final say on the Competition Commission’s verdict.
The Commission is unlikely to block the BSkyB takeover in its entirety. If it did that would cause Hunt a serious dilemma. Can you imagine the political row and cries of fix if the Culture Secretary overturned the express findings of an independent, specialist competition body taking its decisions in the national interest?
Luckily he will probably be spared such a cruel choice.
The arguments for an additional threat to media plurality in the UK beyond that posed already by Rupert Murdoch are actually quite weak.
Murdoch already has effective control of a television service he built from scratch and has also invested hundreds of millions in the UK newspaper industry when not so many people were interested in doing so.
Murdoch will also have to raise, perhaps as much as £9 billion, to complete his purchase.
As for Sky News and plurality of voice, the UK’s first 24 –hour television news channel may be a bit flighty at times but has remained firmly in the UK television news tradition and has never been a mouthpiece for Murdoch interests.
Rupert Murdoch is too big and I don’t like him are not arguments that will cut the mustard at the Commission.
Two factors will worry the Competition Commission as it wrestles with intangibles such as where the public interest lies and what constitutes plurality of voice.
Would total Murdoch control of Sky News change its character- after all we only have two non-stop domestic television news channels in the UK.
And would total control of BSkyB lead to joint Sky-newspaper subscriptions? There is actually little to prevent that happening at the moment if it were a straight commercial deal.
The Competition Commission could limit the use of loss leaders in this way – something that would damage rival publishers – and have the matter monitored by either Ofcom or the Office of Fair Trading.
As for Sky News there is no point seeking voluntary undertakings. Murdoch has a history of overlooking such devices.
The good news is if Murdoch were to turn Sky News into a British version of Fox watch the audience melt. It would be extremely bad for business.
All of which means that before this year is out Culture secretary Hunt will be in the relatively comfortable position of being able to accept a Competition Commission go-ahead for the takeover, complete with any conditions they will recommend.

Raymond Snoddy

Influence marketing  is all very well. Influence is obviously a good thing but to start believing  that this means that advertising in the conventional sense is somehow dead or dying is just plain daft.

In fact there is some recent evidence that if anything it might be about to make a comeback at least. Huge consumer goods companies such as Procter & Gamble, Unilever and Arla the Danish food group are all looking to extend their television advertising to cover the marketing of their corporate brand.

P & G, for example , which spends £5.5billion a year in advertising – not too much sign of death there- is planning to underline its corporate contribution on television and not just its individual brands.

An increasing number of companies are also putting their corporate logos on their individual products to make the connection in between the two in the public mind.

Unilever, for instance, has found longer-term benefits from including its corporate  logo onproduct advertising.

P & G is about to run full length corporate ads in the UK trumpeting its sponsorship of the 2012 London Olympics following a successful trial last year in North America around the Winter Olympics in Vancouver.

You could call this a form of influence marketing but it is influence marketing that marches in step with traditional media rather than being a substitute for it.

In the UK ITV should benefit from such a change in corporate attitudes and national newspapers are increasingly staking their claim as effective vehicles for brand advertising rather than just tactical advertising.

Television remains the quickest and most effective way of transmitting brand values and the effect can usually be measured and monitored.

Raymond Snoddy

It’s a really bad year for Oracles – particularly media Oracles.

Not because it’s particularly difficult to forecast the future. The problem is this year it is far too easy.

In fact 2011 could be the most predictable year since records began. Even the summer will be predictably hot.

The more you think about it, the worse it gets as far as media Oracles are concerned.

Instead of 18 months, or even two years of tasty speculation about the BBC licence fee settlement, the damned thing has been settled for the next six years with very predictable consequences for posts, pay and programmes.

Over at ITV Archie Norman and his friend Adam Crozier never hesitate to point out they have a five-year plan for the future – changing the balance between pay and advertising revenue, building up the production base both at home and abroad and sitting on Simon Cowell’s tail to produce the Big Blockbuster quiz.

Where’s the room for serendipity there?

ITV revenues will rise but not by as much as expected. Ditto profits and share price.

How predictable is that.

All would-be media Oracles should at least be grateful that Lord Birt, Tony Blair’s blue-sky thinker, appears to have retired from the field of battle.

Five-year forecasts were meat and drink for Lord Birt and if you asked him nicely he would run you up a 10-year-forecast or even a 20-year special.

An end to uncertainty not just history.

Over at the rough end of the market the future of FIVE is completely assured and the flow of redundancies will dry to a trickle.

Not even Richard Desmond has yet managed to invent a fully automated television channel which employs no one at all, apart perhaps from an ad sales force- though there are persistent rumours that he is working on just such a concept.

The future of Channel 4 is comfy, cosy and assured as the new team in charge, Lord Burns and chief executive David Abraham, pursue a Back To The Future policy.

They have faced reality – rather than reality television – and embraced the spirit of the times: self help.

Haven’t we all.

We can also predict with absolute certainty that towards the end of the year there will be an outbreak of local television in the UK.

This will happen because Culture Secretary Jeremy Hunt is like a dog attached to a trouser-leg and won’t let go and because the BBC has to provide an initial £25 million plus £5 million a year in support. Who wouldn’t want to fill their boots with some of that?

The crystal ball is going unexpectedly hazy on the prospects for Channel 6 – the plan to support lots and lots of local TV stations with a national spine of advertising-funded television.

Lazards banker Nick Shott – or should that be Lord Shott – unfortunately advised the Culture Secretary that Channel 6’s assumptions are unreasonably optimistic and that the scheme is merely a way of launching a new national television channel by the back door.

The consequences seem predictable. After the initial flurry no local TV no Channel 6.

It is equally certain that the BBC director-general Mark Thompson, who honestly believes that he negotiated not just the best deal in the circumstances but a “good” licence fee settlement, will stay on to implement his good fortune.

Except that is if a new chairman of the BBC decides in the best traditions of the Corporation that it is yet again time to fire a director-general.

After all there have been no DG defenestrations since Greg Dyke.

But the new BBC chairman- as a decent Tory Lord Patton seems a predictable bet – will surely decide to save licence payer’s money and not give Thompson a big golden good-bye.

Watch, however as the rolling one-year contract is “voluntarily” renegotiated and turned into a fixed contract on more modest terms.

But the really predictable things are the ones that aren’t going to happen in 2011.

Rupert Murdoch won’t give up his paywalls despite the growing flow of data suggesting it is not one of his better ideas.

At least Murdoch will have the money to continue funding his newspapers as he gets his hands on all of BSkyB – the result of Hunt getting his hands on the decision rather than Vince Cable who has tap-danced his way out of any influence if not entirely out of power. Yet.

When a politician becomes totally ridiculous the consequences are always inevitable.

No national newspapers will close in 2011 and there is no chance whatever that around 650 regional newspapers will be gone by 2013. The original, wildly pessimistic prediction, was the work of a lesser Oracle – Claire Enders.

CRR will not be abolished though there is clearly room for modest reform.

Even when viewed through pink-tinted special glasses 3D TV will not set the world alight in 2011.

You will definitely need the pint-tinted glasses, or maybe that’s a magnifying glass, to see the progress of YouView next year.

Channels will not disappear – if anything the power of established brands will increase as more and more dross oozes onto the screen.

Enough of this negativity – on-demand television will at last make the major break-through.

It can be confidently predicted that in 2011 the share of the total TV market taken by on-demand will soar from the present six per cent – all the way up to seven per cent.

But don’t get carried away, most of that increase will still come from mere, good old-fashioned catch-up television.

The Prime Minister will not unleash a complete deregulation of commercial radio despite a sage word of advice from his media mate Kelvin Mackenzie.

Kevin, the man behind L!ve TV and talkSport, even went on to tell his friend Dave that after commercial radio he could give commercial TV the same treatment.

As an honest man Kevin didn’t even try to talk up the Prime Ministerial response.

“ Mmmmm,” replied the former Carlton director of communications.

So rest assured. Everyone can head off to celebrate Christmas in the queues at Heathrow secure in the knowledge that 2011 is sorted.

No news really is good news.

Raymond Snoddy

It is entirely possible that on-demand internet television will one day rule supreme but there is strong, accumulating evidence from Europe that at the very least its hasn’t happened yet.

The hard numbers  came from Ingrid Deltenre, director-general of the European Broadcasting Union at the recent IBC conference in Amsterdam. And obviously she is in an ideal position to survey what is going on across Europe.

The numbers are really quite spectacular.In the past 10years the number of television channels available in Europe has increased from just over 2,000 to more than 7,500 and rising.

What exactly has been the effect on the audience share of Europe’s public service broadcasters in the face of such an explosion of choice? Why their share has fallen all the way down from just under 32 per cent to 29 per cent. In the circumstances that amounts to a remarkable degree of stability – though many have been hit financially, of course, by the advertising recession.

The evidece would suggest that while viewers adopt pay TV to varying degree across Europe there is still considerable loyalty to national broadcasters.

Yle of Finland has a 43.8 per cent share, VRT of The Netherland is on  41.3 per cent and even RAI which has to cope with Berlusconi TV has a 40.7 per cent share.

The numbers are averages and some of the better performances are in smaller countries but they should help to prevent some of the usual vacuous talk about traditional television being on its last legs.

It is even possible that programmes from the traditional broadcasters will dominate the new connected online television world just as they have dominated catch-up TV through devices such as the iPlayer.

Raymond Snoddy

Rather predictable howls of anguish have gone up from ITV following the Competition Commission’s decision that the contracts rights renewal system (CRR), which determines how ITV airtime is sold, should stay in place for now.

There are strong arguments on both sides. ITV claims that the system put in place in 2003 to enable the Granada-Carlton merger to  go ahead is damaging to the UK’s creative industries following the “seismic” changes to the television advertising industry. Communications regulator Ofcom  has found the CRR restrictions no  longer “necessary or appropriate.”

Yet the Commission can say that ITV is still a dominant force in the UK television advertising market and that anyway it is overstating the costs of the disruption and distortions that flow from CRR.

In an important sense ITV is, for now, trying to have it both ways on CRR. With one voice it argues that TV advertising is still the most powerful medium for brand development and protection. And  indeed it is and advertising revenues are rising with growing signs that the worst of the recession may be over.

With another voice ITV is happily pleading poverty and seeking release from a mechanism designed to prevent abuse of  the broadcaster’s “dominant ” position. The new regime at ITV has now decided to fire the starting gun on a broader campaign for liberalisation of the media in the UK.

The target should be the general insularity of the UK’s economic regulators. They tend to operate within the parameters of  an  isolated UK market which does not exist  any more. Companies like ITV can point to ferocious competition from relatively unregulated giants such as Google and Yahoo.

Next time round ITV should get its liberalisation and the abolition of  CRR – unless of course ITV dominance of the UK TV advertising market actually increases.

Raymond Snoddy

In the three way media political battle of recent weeks there has been one clear winner – old fashioned network television. Academics may twitter on for years – and probably will – about the relative influence of broadcasting, newspapers and social networks and the break-down of tribal loyalties but really there is no point in denying the obvious. Newspapers, radio and social media contributed  significantly  -  it was  the telly wot won it for instant startling impact.

The Lib-Dem slope on the graph, or worm, shot up by  an unprecedented  8 percentage points virtually the minute  leader Nick Clegg opened his mouth during the first televised debate on ITV which attracted more than 9 million viewers. That is media power and influence in anyone’s money. It was television too which turned  Gillian Duffy  into an instant international star, and with it the most  electrifying moment of the campaign which will be remembered long after the spate over tax credits has gathered dust.

After the election it might be time to have a debate about the ethics of  broadcasting accidently recorded private conversations. But maybe that horse has already  bolted forever. If the broadcasters had  decided to  sit on the recording, unless it had been immediately destroyed  it would have inevitably  leaked online and spread like wildfire, although the impact would not have been so instant or  universal.

Perhaps new media is best at  gradually gathering a public  mood or  highlighting an  issue of importance ignored by the mainstream media – a complementary force.  Maybe social networks are still assembling their strength and will be more  powerful next time. Yet perhaps  they will always  be  too diffuse, too fragmented to have  much influence over something as contradictory as a British election campaign.

For now it was the telly that won it although different less constrained formats will be needed for the next leadership debates to retain interest once the novelty has  worn off.

For  commercial television the  message is clear. If TV can sell politics in an age of cynicism and expense  scandals then it can sell virtually anything and bolster any  brand. Marketing managers should pay attention. It’s about  visual impact stupid.

The big media  loser?   The Sun. Historically The Sun has been unashamedly biassed for one party or another. It’s the naked cynicism that offends  - manufacturing an artificial bias in the interests of owner Rupert Murdoch and News Corporation – but, amusingly,  maybe getting the call significantly wrong this time.

Raymond Snoddy

Avatar has of  course been the star in the results show for Rupert Murdoch’s News Corporation with taking of  $2.7 billion. 3D is clearly a dramatic profitable new  twist for good old  fashioned trips to the cinema. It helped News Corp to  quarterly profits of  £554 million. But what’s this?  Advertising is returning to Murdoch’s  traditional TV stations in the US and Fox News is going gangbusters.

Then there is something that has even surprised old media hand Murdoch – advertising is coming back to a range of  his print businesses – including the  Sunday Times and The Sun.

“There have been many weeks when the London Sun has  had  all-time records in revenue. I’ve got to  tell you, I’m surprised, but  it’s  very welcome,” says Murdoch.

Across a huge  international business like  News  Corp some part of the empire must be causing concern. No question. It’s MySpace.

Five years after paying $580 million for the social networking site My Space is still being described by Murdoch as  ”work in progress.” They’re still talking about  maybe having a  cash positive business by 2011.

There’s a moral there somewhere.

Raymond Snoddy