For Broadcast October 4, 2007

Will Virgin 1 prove tobe £40m well spent?

Virgin 1 has been launched with Branson-led hype and cute on-screen graphics. It even achieved near-decent first night ratings and I enjoyed The Riches (who'd have thought Eddie Izzard could play a compelling thief?).

But if you ignore the hype, Virgin 1 is just another channel in a fragmented market. It has a Freeview slot (which will help with the advertisers, no question) and a few brave commissions (a Rageh Omaar doc series was more my style than Penis Envy) but the schedule doesn't appear to be significantly different from what's already out there.

And is it really such a bold aspiration to beat Sky One, which is having its own problems keeping viewers tuned in? In fact, the Virgin 1 target market - young male viewers - is just the kind which looks for programmes first and channels second.

So perhaps the best hope for Virgin 1 is channel honcho Johnny Webb's vision that this new "channel" has to be about 360-degree programming and platforming - so that the effort on the channel will be felt far beyond telly and into the subscription business which is the bread and butter for its cable operator owner.

Webb has launched Virgin 1 with this intention made clear Ð internet-only shows and mobile content are also part of the equation, as is user-generated content on the related site and late night on the channel.

As new free-to-air channels go, Virgin 1 is not bad. In addition, with the Competition Commission saying Sky's part-purchase of ITV is not in the public interest, maybe Virgin will be able to step in again. In that case, Virgin 1 would be part of a much bigger channel party. Even Branson wouldn't need to hype that.

How can AFP get to be a bigger part of the funding equation?

You would think that with the TV ad market under pressure and growing at only 2% to 3% a year, every chance to get more money from advertisers for shows would look to be a sure thing. You would be wrong. In the UK, advertiser-funded programming (a UK version of the US's product placement-heavy branded entertainment) has been a hard sell and as a result there is very little of it on screen.

According to WPP-owned media agency Group M's first attempt to track AFP, such output is worth £23m this year, a mere rounding error on the billions spent by broadcasters and advertisers. However, while TV advertising will grow by 2% or so this year, Group M sees AFP growing at 17% to £27m in 2008.

So why isn't there more? First, AFP is difficult because the rules around it are unclear. It operates a bit under the radar of the more transparent sponsorship code, so there is a bit of "don't ask, don't tell" whiff about the whole process. Second, it is difficult to get all of the vested interests involved in getting AFP to agree on the creative and commercial deal.

One of the biggest issues is that there are too many people in the room. Nicky Buss, ITV's advertiser development director, recalls a meeting with 44 people all trying to get their oar in on an AFP project. Programme-making by committee does not work.

There is money to be had from brands, but unlocking it will require better dialogue between them, the broadcasters and producers, says Group M's head of entertainment, Kate Marsh.

A better definition might help too. AFP is not about putting Coke cans in American Idol (that's product placement) and it is not branded bumpers (that's sponsorship). AFP - or "posh sponsorship" as North One's head of commercial and digital content, John Nolan, calls it - is not a media buy. It is an investment decision with a business model attached. It's private equity for programming, and it's about time.