Kate Bulkley, Media Analyst.

Pier to pier technology

By Kate Bulkley

The Guardian

Monday October 31, 2005

The ITV Local broadband TV channels in Brighton and Hastings have pulled in tens of thousands of hits in two weeks, offering hope that such channels could tap into local advertising to become a standalone business for the network

Brighton: the area was chosen for the trial because the number of local people with access to broadband internet at home is higher than the national average Photograph: David Sillitoe

Brighton: the area was chosen for the trial because the number of local people with access to broadband internet at home is higher than the national average Photograph: David Sillitoe

In its first 24 hours, the new ITV Local broadband TV channels in Brighton and Hastings attracted 35,000 people who viewed the internet-delivered channels for an average of 45 minutes each.

A fortnight on and the site is "pulling in tens of thousands of hits, with average usage time of 20 to 25 minutes".

There may have been a certain novelty element that added to the early numbers, but Lindsay Charlton, the managing director of ITV Meridian and director of the ITV Local project, believes the ITV Local channels could become a standalone ITV business, leveraging ITV's brand and content while tapping into an estimated 2bn of local classified advertising across the UK that until now has been the exclusive domain of local newspapers.

"There is a local audience below the ITV audience that we haven't been able to get to," said Mr Charlton. "There are local classified and even potentially government money for statutory advertising. My online sales team says this is a proposition that advertisers are waiting for."

ITV estimates that there is 2.5m of display, local radio and local classified advertising a year in the Hastings and Brighton areas alone.

ITV has not yet begun talking to media buyers specifically about its new broadband channels, preferring to launch the two services in Hastings and Brighton in a trial for the next three months to let advertisers see how the online channels look.

"We've all been trying to 'get' the internet as TV companies," said Ms Charlton. "Now with the kind of quality that can be delivered on broadband we do 'get' it."

Expanding the consumer base

"This move by ITV feeds into the wider picture of TV companies seeking to expand their consumer base, and the net allows them to do just that," said Arash Amel, a senior analyst at Screen Digest.

"ITV isn't alone in exploiting this portal concept. Almost every major, and even minor, broadcaster is eyeing this strategy to expand audience and revenue potential. But there is still a big debate about how to charge for it."

ITV is working with UK technology company Narrowstep to deliver the new broadband channels so they have a good video quality even at a fairly low broadband speed of 256kbps.

Narrowstep's technology also allows ITV to protect its content from being pirated from the site, something that was a particularly hot issue at this week's Mipcom TV programming market in Cannes where Mr Charlton and Narrowstep executives held a live demonstration of the new service.

"The content is rendered on the server which is behind a firewall and then we add the internet protocol data to identify where the PCs are," said Dilip Shukla of Narrowstep.

ITV Local is Narrowstep's first commercial TV client but the company has also created a broadband TV site for Telewest's Blueyonder TV.

Making use of users' own content

The two ITV local sites (www.itvlocal.tv/) each have seven channels, including local news, weather, classified and events in the area. ITV has also included the ability for people to send in their own videos with the intention of developing video classified advertising as well as a way to create local competitions.

"The show You've Been Framed has worked for 15 years using some pretty ropey video," said Mr Charlton. "This idea of letting people contribute their own content builds on people's desire to see themselves on TV."

Local sports will be added to the sites in the coming weeks of the trial and, taking a leaf out of Google's handbook, Mr Charlton is also keen to add local search to the sites as well.

"The word local is very important here because there are local events that will attract big audiences that we don't have the time to give to on ITV Meridian," he said. "There is a pay-per-view opportunity for events that broadcasters don't exploit, like Cowes Week and the Great Dorset Steam Fair that perhaps people would even pay a fee to watch."

At the moment, the ITV Local channels are free and no registration is required to enter the sites, but clearly Mr Charlton is looking towards revenue-producing opportunities.

"Over four days, something like 250,000 people come and watch the parade of steam-driven vehicles that people bring to the Great Dorset Steam Fair each year. On the Meridian news this might be a two-minute piece, but on ITV Local we could put a camera on the parade and run it all day and there will likely be people in the area and around the world who would love to watch it and perhaps pay for it," he said.

ITV chose Brighton and Hastings as its test areas because about 28% of people have access to broadband internet at home - more than the national average of 22% - with many others having access at work.

At a national level, there are 8m home broadband connections in the UK today and, according to Ofcom, the number is growing by 250,000 new households each month.

The price is right

Mr Charlton says it cost ITV "slightly more than 50,000" to launch the two broadband channels, which is considerably less than the 750,000 to 1m it costs to launch a niche digital TV channel on Sky. Mr Charlton estimates that to launch ITV Local sites to all 15 ITV regions will cost "a few million pounds".

"This is a new world for us and these two services are a first step but I believe TV has come of age on the internet."

The move into broadband TV comes at a time when ITV is beefing up its new consumer unit, including the appointment last week of Ann Cook as controller of ITV interactive and ITV.com.

Ms Cook has worked for the Associated Press and also for US media consultancy Frank N Magid and in the 1990s she led the marketing and communications strategy at Granada Sky Broadcasting, the former joint channel venture with BSkyB.


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