Looking for common ground in Europe鈥檚 media market

The euro may not have many fans in the UK but can the British media industry learn lessons from our Continental cousins? Adam Woods reports.

To turn a clich茅 into a truism, Germany is another country: they do things differently there. With the acquisition of the remaining 35.4% of Five for some 拢247.6m by RTL, Bertelsmann's pan-European broadcast group, the British terrestrial television market welcomes a foreign media owner for the first time. Questions inevitably have arisen about just what that might mean.

For Five, it means the possibility of more investment in programming and the chance of a marriage with Flextech 鈥 a move which would encourage a satisfying resemblance between Five and RTL's multichannel portfolios in France and Germany.

In other respects, as a Luxembourg-based company which has founded its growth on its wholeheartedly European approach, RTL is fairly unlikely to take this opportunity to impose a new set of Teutonic trading practices on the sales force at Long Acre.

But the injection of European blood into the British media family makes one wonder about broader questions: what do we look like to them? Do Europeans regard our media methods in the same vaguely quizzical way in which they tend to appraise our other national characteristics? What might we learn from them? And what might they be planning to teach us?

Trading

For television, perhaps the key difference in the day-to-day trading world is the common European practice of creating a single sales point for all related products. Like the character in Local Hero who simultaneously runs every business in the village, the TV sales executive in continental Europe has a bewildering number of bases to cover.

"Over here, additional products spawn new departments. In Europe, everything from mobile, to sponsorship, to advertiser funded programming, tends to be sold by the same person," says international media consultant Fran Cassidy.

For all our commitment to integration, when one considers the premium placed on specialist sales expertise in the UK media industry, it is hard to picture that kind of multi-tasking catching on over here.

"I personally think they must have skills base issues," Cassidy believes.

And yet there is clearly a strong case for the practice. Frank Eijken, the senior vice president for sales and marketing at SBS Broadcasting in Amsterdam, soon to take up a new post as chief commercial officer at RTL Netherlands, defends the logic of the system.

In SBS' case, it gives the broadcaster's top 20 clients the benefit of a one-stop shop.

"There is an advantage to it, because you are handling their entire communication budget and it can create a much more intense relationship with your advertiser."

Eijken thinks he knows why the UK is not keen to consolidate in the same fashion.

"Maybe what they fear in England is that with a bigger budget, you have to give a bigger discount," he says. Quite possibly.

In terms of the data available to those sales teams, Barb chief executive Bjarne Thelin believes the UK can look any of our European neighbours in the eye.

"My experience so far 鈥 and I have met a number of people from different countries and have also had quite a lot of people from different countries approach us 鈥 is that a lot of Europe and a lot of the world is looking at what is going on in the UK to benchmark themselves against," he says.

"The basic audience measurement systems are fairly similar in concept across Europe. It is probably the execution that can be a little bit different and that is really defined by the needs of the market. What we have in the UK is obviously a very advanced and well-developed marketplace in terms of the consumer point of view, but also in terms of the advertising market 鈥 advertisers and agencies and broadcasters and their expectations, their requirements from data. I think what you will find is that the UK probably is at the forefront of Europe in this respect."

Digital switch-over

The infrastructure within which our sales teams work, and therefore the products they sell, certainly vary from country to country and during a time of great change, the British television world can certainly afford to glance at the analogue-to-digital progression of Europe's other major markets.

With the prospect of a Bertelsmann war chest to delve into, rumours of a possible love-match between Five and Flextech shine a spotlight on an infrastructural element that markets such as Germany rightly prize 鈥 namely, the strength of their free-to-air multichannel offering.

"RTL is actually a very good example of a company we can learn from in this country, because of the way they have used satellite to build their base of free-to-air channels," says Andrew Stirling, an independent media consultant who previously worked for Ofcom and, in that capacity, made a study of the German market's relatively easy transition from analogue to digital TV.

"In Germany, you have 40 or 50 channels available free-to-air and so it really is a much more serious proposition there," says Stirling. "For that reason, continental Europe has been much more used to multichannel and the possibilities that come with it."

New media

As well as being the first British terrestrial broadcaster to come under continental European ownership, Five was also the only one without a major stake in the digital world until two weeks ago when it announced its first foray into digital TV with Brainteaser TV in collaboration with YooMedia. To see a still virtually single-platform British broad-caster sharing a portfolio with RTL's German and French multichannel media properties is to appreciate the work that needs to be done in free-to-air, where only Freeview has made any progress. In terms of repackaging content for delivery via platforms such as mobile and broadband, the Europeans also have the edge, largely because of their strength in multi-channel broadcasting.

"There is a lot of interesting stuff going on," says Stirling. "But I guess our commercial channels are slightly slower, because the regulation has allowed them to be very profitable in their own market, and they haven't had to worry about looking at overseas too much. That is particularly true when you are in a commercial game, when the advertising revenue is really what you are aiming for."

In fairness, though certain technologies may be slow to catch on, the UK is no more of a leviathan in most respects than the other long-established European media markets, largely because those markets big enough to sustain themselves largely on domestic business and home-grown ideas tend to do so.

"The big markets like Germany are pretty isolationist 鈥 there's not a lot of non-German media," says John Nolan, head of commercial programming at independent production company North One Television. "It's the same with France and with the UK, to some extent. They silo themselves and they can silo themselves because their markets are big enough."

Clusters of markets such as Benelux and Scandinavia certainly have more experience of dealing across borders, and with the introduction of Five into a European family, its new owners may look to encourage such practices here. "At the moment, I don't think there is a deal that has been done with Five that could feed out to RTL across Europe, because we just don't have that backwards/ forwards capability," says Nolan.

Product placement

Nolan has produced more than 100 hours of branded television content throughout Europe and the US in the past 10 years. He is currently facing down the product placement scandal in Germany, in which hundreds of cases of illegal product placement have been brought to light on public broadcaster ARD.

Not to be too flippant about it, a case like that one can teach us a couple of things. For instance, we might learn that a lot of product placement can go into a TV programme before anyone notices and, interestingly, given the liberal attitude taken by Brussels to a scandal that has driven German cultural 22MediaWeek 30 August鈥6 September 2005 www.mediaweek.co.uk commentators through the roof in outrage, that EU broadcasting regulations may be on the brink of relaxing.

Reaction from Germany suggests attempts by the European Union's media regulator, Viviane Redding, to overhaul restrictions on product placement 鈥 ostensibly to make Europe more competitive with the US 鈥 could be blocked by German law. Meanwhile, Ofcom's view on such matters 鈥 allegedly an increasingly relaxed one 鈥 illustrates one more difference between them and us.

Will the advent of a more integrated Europe succeed in roping us all closer together?

Who knows? Certainly, the prospect of standardising practices across European media, whether through regulation or acquisition, is one which would test the most ardent Europhile.

As Zoltan Vardy, US-born commercial director at Hungarian broadcaster TV2, points out: "That is one of the great misconceptions when you see it from London or New York 鈥 that these markets are quite homogeneous, when in fact they are all very different.鈥


Smaller Guardian will follow the European lead

Of course it's not just the TV landscape where we differ from our continental cousins. The European print market for example is colossal and there the UK already seems to be following their lead.

The Guardian, whose much-anticipated launch of a smaller-sized version of its broadsheet is expected next month, is shunning the tabloid format favoured by an increasing number of UK papers and instead, is modelling itself on Germany's Berliner newspaper. The size is already used by a number of other European newspapers, including France's Le Monde. The Guardian at least obviously thinks the Europeans are on to something.


UK model provides blueprint for market leader in Hungary

Ironically, RTL's presence in one of Europe's fastest-growing media markets offers proof that our island mentality still produces ideas the Europeans want.

In Hungary, RTL Klub, the market leader among younger audiences, recently enlivened things by instituting the station average price (SAP) model which, besides the UK and Ireland, is otherwise found precisely nowhere in the world.

Zoltan Vardy, commercial director at TV2, the other leading broadcaster in Hungary, says the situation is unique in view of the fact that TV2 has stuck with a guaranteed audience model, like everyone else in the continent. As you might expect, he has a view on the UK model.

"It is basically not very client-friendly, to be honest," he says.

"It does give control of ratings delivery to the station. We have about 40%of the TV ad market and we have an alternative solution for clients which enables them to get a specific number of ratings as long as they send in their bookings by the bookings deadline."

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