Innovative & Strategic Challenges for
 European Commercial Broadcasters

                          Strasbourg, 1 March 2010
2
“Incremental Change or Permanent Revolution?”




                                                3
1. Nature of Change in the European B’cast Business


   a)   Pace of Change Accelerating (speed at which new technologies...
The accelerating pace of new technologies
        Ways to distribute electronic media content
                            ...
a) What is “broadcasting”?
   i. “Linear/Non-linear” debates at EU level 2006-07

   ii. Extension of broadcasters’ busine...
2. Structural Shift of the entire industry


           “Not a business sector like any other”…




                      ...
Assumptions underpinning the (public and
commercial) TV sector 1950-2000:

i. “Dual System”
ii. Culture or Commerce?
iii. ...
Changes brought about by :


i. Entry of commercial players in mid-80s, with only limited impact on the
   integrated mode...
Shift in Assumptions :

i.     Beyond the Dual System;

ii.    Private sector unambiguously commercial;

iii.   Quantitati...
3) Impact across the value chain




                                   11
Simplified media value chain : Revenue → Investment in Content →
Distribution →… in competition with → produces ROI → Reve...
a) Revenue : Diversify !


i. Commercial Imperative;

ii. Four Stages of Revenue Diversification :




                   ...
(a) Beyond the 30-second spot : new advertising techniques,
    product placement, online advertising, etc;




          ...
(b) Auxiliary revenues from programmes : CD, DVD, call TV,
    gambling;




                                             ...
(c) The Senderfamilie concept




                                16
17
18
19
(d) Accessing pay TV revenues




                                20
b) Investment in Content


i. Rights Market : Incumbency and New Entrants, Creation of New
   Rights/Windows

ii. The Excl...
22
Evolution in Decision-Making


• Traditional career path of programme-makers to CEO challenged by (a)
  increasing demands...
“We take a local approach, with each business at arm´s length
  from the others. Very often we work with local partners. I...
25
c) Distribution


i. New Issue for “first phase” commercial broadcasters;

ii. Cross-platform strategy;

iii. Access to sp...
d) Competition


i. Competition intra-sector : relevant markets for advertising, content, audience;

ii. Legacy : public b...
e) ROI


i. Protection against piracy/unauthorised redistribution : what level, against
   whom?




                     ...
Conclusions/Open Questions




                             29
It is uncontroversial to state that


• The industry is changing faster than ever before;

• The commercial FTA model in p...
Perhaps more debatable :

i. That the fundamentals, in both revenue and content, remain sound;

ii. That the core business...
Thank you! Questions?

Contact: ACT
Association of Commercial Television in Europe
Rue Joseph II, 9-13, BE - 1000 Brussels...
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U4 06 Innovative and Strategic Challenges for Commercial TV (by ACT)

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Presentation held by the Director General of ACT (Association of Commercial Television in Europe) in March 2010 at the european television and media management academy (etma) in Strasbourg, France.

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U4 06 Innovative and Strategic Challenges for Commercial TV (by ACT)

  1. 1. Innovative & Strategic Challenges for European Commercial Broadcasters Strasbourg, 1 March 2010
  2. 2. 2
  3. 3. “Incremental Change or Permanent Revolution?” 3
  4. 4. 1. Nature of Change in the European B’cast Business a) Pace of Change Accelerating (speed at which new technologies come to market); 4
  5. 5. The accelerating pace of new technologies Ways to distribute electronic media content Mobile Broadcast TV 3G SVOD PODCAST VOD TVoDSL DTT XXIth century WEB XXth century DVD DIGITAL CABLE DIGITAL SATELLITE ANALOGUE SATELLITE ANALOGUE CABLE VHS TELEVISION CINEMA 1950 1960 1970 1980 1990 2000 2010 5
  6. 6. a) What is “broadcasting”? i. “Linear/Non-linear” debates at EU level 2006-07 ii. Extension of broadcasters’ business activities 6
  7. 7. 2. Structural Shift of the entire industry “Not a business sector like any other”… 7
  8. 8. Assumptions underpinning the (public and commercial) TV sector 1950-2000: i. “Dual System” ii. Culture or Commerce? iii. Qualitative measurement; iv. Close strategic relationship with cinema industry v. Vertical integration the default model (commission-production-transmission) vi. Relatively simple “virtuous circle” in commercial television; vii. Content-driven business strategies – distribution not an issue in many markets 8
  9. 9. Changes brought about by : i. Entry of commercial players in mid-80s, with only limited impact on the integrated model; ii. Launch of pay-TV platforms (1990-2003); iii. Multiplication of broadcast channels (with obvious impact on market share of leaders) ; iv. New market entrants (ICT) – particularly profound impact on the assumptions above 9
  10. 10. Shift in Assumptions : i. Beyond the Dual System; ii. Private sector unambiguously commercial; iii. Quantitative measurement and tools adopted from “normal” business – e.g., ARPU; iv. Shifts in relationships among genres : cinema, sport, original production; v. Publisher-broadcaster model and rise of independent producers – a sector undergoing its own structural shifts; vi. Driving revenues increasingly complex (see below); vii. Distribution as important as content ownership 10
  11. 11. 3) Impact across the value chain 11
  12. 12. Simplified media value chain : Revenue → Investment in Content → Distribution →… in competition with → produces ROI → Revenue 12
  13. 13. a) Revenue : Diversify ! i. Commercial Imperative; ii. Four Stages of Revenue Diversification : 13
  14. 14. (a) Beyond the 30-second spot : new advertising techniques, product placement, online advertising, etc; 14
  15. 15. (b) Auxiliary revenues from programmes : CD, DVD, call TV, gambling; 15
  16. 16. (c) The Senderfamilie concept 16
  17. 17. 17
  18. 18. 18
  19. 19. 19
  20. 20. (d) Accessing pay TV revenues 20
  21. 21. b) Investment in Content i. Rights Market : Incumbency and New Entrants, Creation of New Rights/Windows ii. The Exclusivity Premium iii. Impact of Regulation iv. Reinvention of Key Genres v. Impact on Corporate Decision-Making 21
  22. 22. 22
  23. 23. Evolution in Decision-Making • Traditional career path of programme-makers to CEO challenged by (a) increasing demands of role and (b) other opportunities for programme-makers • Evolution of television towards a “normal business” has led to complex but devolved structures • Distinguish between strategic management and operational autonomy 23
  24. 24. “We take a local approach, with each business at arm´s length from the others. Very often we work with local partners. In Germany, we are German, in France we are French and in the UK we are British” 24
  25. 25. 25
  26. 26. c) Distribution i. New Issue for “first phase” commercial broadcasters; ii. Cross-platform strategy; iii. Access to spectrum iv. Digital forces historic competitors into compete/collaborate model (e.g., multiplexing) 26
  27. 27. d) Competition i. Competition intra-sector : relevant markets for advertising, content, audience; ii. Legacy : public broadcasters iii. New Entrants: newspapers, telcos, internet players – role of content owners? iv. Consolidation in the sector? 27
  28. 28. e) ROI i. Protection against piracy/unauthorised redistribution : what level, against whom? 28
  29. 29. Conclusions/Open Questions 29
  30. 30. It is uncontroversial to state that • The industry is changing faster than ever before; • The commercial FTA model in particular will need to continue to adapt its revenue models to anticipate and respond to these changes; • Content remains central to the business plan of any successful broadcaster 30
  31. 31. Perhaps more debatable : i. That the fundamentals, in both revenue and content, remain sound; ii. That the core business of mass audience commercial television will not only endure but will prosper; iii. That the media regulatory framework, including the appropriate role of state intervention, needs to be completely overhauled to cope with the new world; 31
  32. 32. Thank you! Questions? Contact: ACT Association of Commercial Television in Europe Rue Joseph II, 9-13, BE - 1000 Brussels Tel: + 32 2 736 00 52 - Fax: + 32 2 735 41 72 www.acte.be Ross Biggam Director General rb@acte.be

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