FORUM: What are the hot media issues for the new year? - What sort of a year will 1997 be? There’s the small matter of a general election - usually good news for the advertising industry over the short term. Have the good times returned for the me

Who are the winners and losers likely to be in 1997? What are the hopes and fears of those in the advertising industry? Well, surely one thing is clear. This year will be all about Channel 5 - won’t it? Pencilled in for launch around about Easter, it will be the media event of the decade, the culmination of ten years’ lobbying by the advertising community.

Who are the winners and losers likely to be in 1997? What are the

hopes and fears of those in the advertising industry? Well, surely one

thing is clear. This year will be all about Channel 5 - won’t it?

Pencilled in for launch around about Easter, it will be the media event

of the decade, the culmination of ten years’ lobbying by the advertising

community.



Jim Marshall, the managing director of the Media Centre, says that 1997

will be seen as a watershed year. ’There will be a very obvious conflict

between the past and the future - the Channel 5, digital television,

fragmented media environment future. This year will be the last in which

the practices of the past have any chance of holding out. Digital will

be in its infancy, Channel 5 will probably struggle as media launches

usually do and I can’t see the ITV trading system changing all that

much. But if the past wins, it will be a hollow victory and its

practices will begin to look spectacularly obsolete.



’As for specifics, the battle between the Express and the Mail will be

interesting. I think we’ll see further mergers in ITV and in satellite

and there will be further consolidation in advertising sales both within

and across media. Lastly, I think we’ll see some interesting things come

out of the Flextech/BBC joint venture.’



Christine Walker, the chief executive of Zenith Media, thinks it will be

a pretty good year all round: radio’s revenue growth will slow down, but

it will still be around 12 per cent; even if a Labour government

eventually bans tobacco advertising, outdoor will benefit massively from

the election campaign no matter who wins; although newspaper

circulations will continue to slide - unless they are buoyed up by cover

price cuts - ad revenue will grow by 5 per cent or more; and the

magazine market, she predicts, should continue to be vibrant, especially

in the male sector, chalking up a 5 per cent ad revenue growth.



However, the real focus will be TV: ’Although its initial impact on the

advertising market will be minuscule, the biggest subject in TV will be

digital - BSkyB will obviously dominate its introduction on

satellite.



But I also expect Sky to make a bid for a digital multiplex and I

predict that Carlton will go for one alongside the one it is guaranteed

for simulcast transmission. I think that, of the ITV companies, Carlton

has the vision to want to get into pay TV.’



And Walker is reasonably optimistic about Channel 5: ’I think it will

attract about 7 per cent of commercial viewing and unless something

disastrous happens, it can take around pounds 180 million - not bad

given it will miss the first third of the year. As for ITV, expect to

see further consolidation of ownership, but I don’t believe we’ll see

much change in the trading system. There is absolutely nothing wrong

with the station average price mechanism - why would the accountability

offered by this benchmarking system ever look outdated?’



Phil Georgiadis, the chief executive of Initiative Media, believes that

advertising expenditure will continue to grow in 1997 ahead of RPI.

’Barring a retuning nightmare or a complete failure of sales policies,

the growth - around pounds 150 million - will be absorbed by Channel 5

and satellite, leaving the old terrestrial stations in a scrap for share

and managing decline.



’Meanwhile, the viewing public will vote for quality programming,

leaving room at the table for only those with the deepest pockets - the

bidding for content will take centre stage from the arguments about

gatekeeping and bandwidth. Watch out for United News and Media, whose

track record suggests that it will make some further interesting mergers

and acquisitions,’ Georgiadis adds. ’Outside television, watch out for

the battle in the weekly magazine market, with IPC taking an aggressive

market-leader stance.’



Ken New, the chairman of New PHD, says that, on the media owner side,

the strong will continue to get stronger and the weak will get

weaker.



’It will certainly be an interesting year, because the pace of change is

increasing,’ he states. ’The great fear with this sort of polarisation

is that it becomes an ever-more commodity driven market. It becomes like

a machine whose imperatives override intelligence and talent. Against

that, with the launch of digital TV, there will be the prospect of even

greater fragmentation. My hope is that talent can emerge - the

opportunity for entrepreneurs and innovation is greater than ever. The

best approach will be an innovation combined with the strength of the

machine.’



New also believes that the industry will have to face fundamental

structural issues: ’We are now painting on a far bigger canvas. It’s not

just about spots and space any more - though getting that side right

will continue to be important. This year will be about the growing

importance of specialisms within media. Auditors will continue to be

important but they will need to adapt to those structural changes and

realise that they must operate on a much more complicated platform.’



New says that budgets should increase this year and although the

election will create uncertainty, he sees no great grounds either for

optimism or pessimism. Mark Cranmer, the managing director of Motive

Communications, agrees that some people are getting carried away. ’It

will be tougher this year than most people think,’ he states. ’Cautious

optimism is the best I can offer.



Some sectors will continue to grow enormously but some traditional

advertisers will begin to change their marketing structures as they

reassess their communications priorities. It’s a different sort of

advertising approach that sets the pace these days.’



He also agrees that there will be a widening gap between the haves and

the have-nots: ’Even if there is a lot more money around, we will

continue to see significant losers within media sectors - strong

companies and brands will continue to do well at the expense of the

weak. The assumption was that when things begin to pick up, everyone

would feel a blanket benefit.



It doesn’t work that way any more.’



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