There is a certain contradiction in talking about the future of television, because the word television, the item itself, has an old-fashioned ring to it. A bit like gramophone or tape recorder, it is a word that teenage boys will snigger at sometime in the future, a word used only by hopelessly out-of-touch old people. And this illustrates just how far the medium of television has come. It isn't defined by the hardware any more, but by content.
2010 was a year when TV programmes continued to transcend popular culture. The X Factor, This Is England 86, Downton Abbey, The Apprentice. These are shows that define the cultural fabric.
TV had an outstanding commercial year in 2010, with all of the ad revenue lost in 2009 returning to the market, plus a bit more. TV has done well during the recession because it works for clients. I'm forecasting 4 per cent growth in 2011, but TV still offers such good value for money that we could easily get +15 per cent again and TV would still be a great investment.
2011 will be a year of evolution to follow the consolidation of the market in 2010. In losing Viacom and ids, we have lost the most creative of the sales houses. ITV, Sky, Channel 4 and Channel 5 now bear the responsibility of creativity and trading innovation.
We can also expect another year of lobbying and hand-wringing down at ITV over Contract Rights Renewal. And on this point I do have some sympathy with Adam Crozier's comments to the House of Lords. Imagine having to make all those dreadfully populist shows such as The X Factor and Britain's Got Talent, just to prop up your share of audience, when, really, all you want to do is support theatre and the arts, audience be damned!
CRR is part of a greater problem, though. With all of the technological changes in the 35 years that I have worked in the industry, our methods of trading have changed very little. Broadcasters' obsession with share, and agency deals that restrict genuine selling, have created a risk-averse trading model, protective rather than entrepreneurial. This is one of the reasons why TV's share of UK adspend (28.5 per cent) is lower than the rest of Western Europe (35 per cent), and even further behind the global share of 45 per cent. We are underselling TV in this country, and it is the responsibility of the broadcasters to look outwards rather than inwards to change it.
If so, which broadcasters should lead this change? ITV wants to get rid of CRR, but only on its terms. And while ITV's sales team will continue to do a good job in protecting their share of the cake, there seems little impetus from any of the major sales houses to grow the UK's 拢3.5 billion spot market; ITV's energy seems to be focused on growing its other, smaller, revenue streams, but growing the spot market would deliver a much bigger prize.
Channel 4 is in a state of flux. Now, more than ever, we really need a truly differentiated, culturally and creatively independent Channel 4. Programmes such as The Million Pound Drop aren't, for me, what Channel 4 is there for. David Abraham has been drafted in to revamp a broadcaster that has lost key programming and personnel in Big Brother, Kevin Lygo and Matt Shreeve, and E4 will lose the rights to Friends in 2011. That's 30 per cent of its impacts gone. Abraham has the energy to succeed, but it's a tough job, and he will need to shed Channel 4 of its civil service mentality.
Sky's technological power, its lack of reliance on adspend, its revenues of 拢6 billion and operating profit of around 拢1 billion make it the best-positioned broadcaster to lead the industry to change. It certainly has the deepest pockets for acquisitions, and Sky Atlantic, with its concentration of HBO content, could be the success story of 2011 and a first for Sky - a genuine pay-TV competitor to the terrestrial drama output of BBC One, ITV1, Channel 4 and Channel 5.
The dark cloud on the horizon is the proposed buyout of Sky by News Corporation that will create an extremely powerful media sales operation. Advertisers, agencies, broadcasters and print owners are understandably concerned about potential rate rises and conditional selling, not to mention the wider issue of plurality. So here's an idea: create a CRR-style mechanism for Sky/News International. At least it would cheer them up over at ITV.
As far as Channel 5 goes, market consolidation has ironically benefited it, as it now has a price point versus the market that can't be ignored. RTL had largely given up on the channel, but Richard Desmond has got a bargain, and what he has bought is potential, and the ability to act quickly and decisively. Nick Bampton is a shrewd appointment and, whatever else, life will not be boring with Desmond and Stan Myerson around.
The single most important televisual development of 2011 will be the launch of YouView. It has the potential to dwarf the 120 million monthly downloads of the BBC iPlayer for the simple reason that watching catch-up TV on a big screen is infinitely more enjoyable than watching it on a monitor.
A cautionary note, though: consumers are easily turned off catch-up TV if there are too many commercial messages. The broadcasters vary in their current approach, but ITV's model of inserting full-length ad breaks into the online streams of their top-rating programmes is not a long-term recipe for consumer happiness.
No review of the TV market would be complete without mention of the BBC. It has finally got agreement on the licence fee being fixed for the next six years. I know that in real terms this represents a declining figure but how many broadcasters right now would take guaranteed annual licence fee income of 拢3.6 billion until 2017?
There is plenty that needs to change in TV in 2011. The trading model and more creative uses of the medium for advertisers are just two. But what is certain is that TV advertising delivers business success, because consumers have never been more enamoured with watching moving images tell a story. That story might be sport, a sitcom, a movie, a documentary. But it's all drama. Technology simply enables us to access that drama more often, at our convenience. And technology will enable TV to have a great 2011.
Steve Platt is the trading director at Aegis Media.