I
write to take issue with Michael Pascoe’s item yesterday (Item 17) when
he wrote: “There’s as big a fashion now for bagging mass-market TV and
boosting multi-channelling and video-over-the-internet and other
pseudonyms for narrowcasting as there ever was for dot coms. Just as
with the earlier fad, there is some lasting truth in it, but you’d be a
mug to swallow it all.”

He’s right. Free To Air television is
not going away as a mass market medium. But what he doesn’t understand
is that the money that underpins its tremendous cost might desert it
before the audience does. All around the world – in territories where
digital growth has not been stunted by the dead hands of a compliant
government and too powerful media owners – advertisers have realised
that the 30 second TV ad is only delivering a fraction of what it was
even five years ago.

And when advertisers start re-inventing
their spend at head offices in New York and here in London, the
structural change will flow to smaller markets, no matter how those
markets have been misshapen by the prevailing politics. Yesterday, The Timesscreamed
“ITV sales head says model is unsustainable”, sighting sharp falls in
ad revenue at the UK’s biggest broadcaster. This morning the papers are
reporting ad revenues at ITV were down 8% for the first half of the year.

Meanwhile, today on BBC Radio 4, Maurice Saatchi of the eponymous worldwide ad agency repeated what he’d written in the FT:
“A modern teenager, in the 30 seconds of a normal television
commercial, can take a telephone call, send a text, receive a
photograph, play a game, download a music track, read a magazine and
watch commercials at x6 speed. They call it ‘CPA’: continuous partial
attention. The result: day-after recall scores for television
advertisements have collapsed, from 35% in the 1960s to 10% today.”

More
and more, agencies in Europe and the States are moving to programme
sponsorship, embedding advertising in programming itself and using
digital channels to speak to a much more targeted market than the
expensive loudhailer approach of an ad on FTA. It all amounts to a net
flow of money away from the economic model that underpins traditional
mass market broadcasting.

The good news is that by throttling
the Australian digital market for the last five years, the FTA networks
have engineered themselves a unique window. By retarding Australia’s
digital growth, they have an opportunity to profit from what’s worked
in the other major markets around the world without the pain of the
world’s expensive mistakes (and there have been some doozies –
OnDigital comes to mind).

But they’ve got to change and they’ve
got to change now. No amount of Canute-like legislation, lobbying or
spectrum fiddling will hold back video delivered over the internet –
and that will be here well before the government’s potential media sea
change in 2012.


Peter Fray

Save 50% on a year of Crikey and The Atlantic.

The US election is in a little over a month. It seems that there’s a ridiculous twist in the story, almost every day.

Luckily for new Crikey subscribers, we’ve teamed up with one of America’s best publications, The Atlantic for the election race. Subscribe now to make sense of it all, and you’ll get a year of Crikey (usually $199) and a year’s digital subscription to The Atlantic (usually $70AUD), BOTH for just $129.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW