For Broadcast October 01, 2009

Broadcasters need to get their houses in order for the industry’s sake.

Surveying the UK media landscape at the moment is a bit like watching a performance of Waiting for Godot: will the person (people?) needed to put the media business to rights ever show up?

It doesn’t look very promising. While the TV business faces the worst advertising recession anyone can remember and an uncertain future in the converged world, ITV’s board has failed - after five months of looking - to secure a chief executive. It has, however, alienated its current chairman and infuriated a number of its largest shareholders in the process.

Frontrunner Tony Ball might have pushed his hand too far, but the board has to be blamed for letting the whole process get out of hand.

Meanwhile, Channel 4 is facing similar ‘gaps’ in its leadership, with both its chief executive and chairman leaving the broadcaster in the next few months. The latter, Luke Johnson, wants someone who understands technology to be C4’s next chief executive, but his shortlist may not please whoever the next chairman turns out to be.

But if there is a distinct lack of new leaders on the horizon, the prospects for commercial broadcasters look better in other areas. After a government U-turn and a commitment from the Tories, they can now expect the introduction of product placement (PP) whoever wins the next election - and it might be a bigger boost than many imagine.

ETS/Madigan Cluff research suggests 65% of UK-produced programmes (worth £1.6bn in advertising money) would be eligible for PP.

Extrapolating from the US, where PP generates about 14% of total US ad spend, UK PP could bring in £211m. The most lucrative category are soaps, with Corrie and Emmerdale as the most likely spots for promotional products to pop up.

Together, Corrie and Emmerdale account for 16% of all UK soaps’ ad revenue, so an advertiser’s first PP call should be ITV. According to ETS/Madigan Cluff, one minute of product exposure in a single episode of Corrie could be worth £250,000 to an advertiser.

Product placement is not a panacea for the industry’s ills, but it is part of the solution that includes lifting restrictions that no longer make sense, such as CRR, and adding new transactional revenue streams such as micropayments for online viewing.

Fremantle Media chief executive Tony Cohen got it right at the recent RTS think-fest in Cambridge: “There is only so much money that will be available, and others are going for it at light speed, so we had better hurry up.”

Cohen was talking specifically about micropayments, but it works as an overall admonishment to the broadcasters. Get your boards in order and your new leaders in place, because these new opportunities aren’t going to wait around. Find new revenues - don’t let Google have the whip hand. Nothing less than the industry’s future is at stake.