A view from Ivan Pollard, a partner at Naked Communications

Perspective: What Sky can teach other broadcasters over-reliant on ads

Everyone keeps looking at Sky trying to hide their envy. Last quarter, it added 429,000 new subscribers to its HD channels, thanks to the Fifa World Cup - tremendous considering it didn't show any of the games.

Profits to June were up 10 per cent, revenues up 11 per cent and it will be launching its 3D channels on 1 October to drive annual revenues beyond its current £6 billion.

It is so flush, it even had time to write me a lovely e-mail: "At Sky ... our commitment to investing in new programmes, channels and technology means that sometimes we need to make an increase to your monthly subscription." And without so much as a by-your-leave, informed me it would be charging an extra £2.50 a month.

Other broadcasters scratch their heads and wonder. It is all about the content, of course ... and then getting people to pay for it. Advertising is still a viable revenue source. It is just that it cannot be the only one and, like all good businesses, prosperity relies on a willingness to diversify and evolve.

The latest figures put ITV's advertising-related revenues around 74 per cent of their total, but trying to get people to pay for content requires that that content be worth paying for and that is ITV's biggest challenge, to my mind. Channel 4's ad-reliance is 92 per cent, so it has even bigger challenges. For both organisations, there will be issues not only about finding new revenue streams but also about cutting the costs of securing the existing ones. I suspect the next 12 months will see a radical change in the shape of the sales operations of the big players.

The debate over the licence fee and the future funding of the BBC returned. Yet another politician has propounded ideas to shift some of the BBC further into the "pay to play" model allowing choice to dictate cost.

Meanwhile, the internet is flexing its muscles. Check out Google TV in America and ask yourself what is going to happen when that gets bigger. Google has no trouble raising revenues from advertising, often at the expense of traditional media owners. And we have Project Canvas in the UK looking to twin the power of the internet with the appeal of the TV and revolutionise the way we all watch ITV and BBC and Channel 4 etc. Good luck with that, though smart people from different organisations all with a vested interest do not tend to move all that fast. I hope they pull it off.

But I am beginning to wonder just how inelastic the price is for subscription TV. It dawned on me that in order to afford to watch TV when I get home, I have to work harder and longer hours to scrape together the money to afford it and, as a result, I never get home in time to watch TV.

Maybe I should just drop Sky and find another form of entertainment. I heard on the radio this morning that radio listening is at an all-time high.

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