MEDIA FORUM: What’s special about the latest TV negotiations? - Someone once said that negotiating is all about getting your own way with a smile. This year’s round of TV deals, however, could find many a buyer or seller sitting with a ric

The 2000 deal-making season, which has just kicked off with the usual round of agency presentations, appears to be particularly fraught.So why is the atmosphere at this year’s wrangles more charged than usual?

The 2000 deal-making season, which has just kicked off with the

usual round of agency presentations, appears to be particularly

fraught.So why is the atmosphere at this year’s wrangles more charged

than usual?

First, reports emerged that ONdigital, the Carlton and Granada digital

operation, has been getting rather a lot of plum ad spots in those two

regions and, as a result, neither are flavour of the month. Whether

ONdigital was given any preferential deals by Carlton and Granada has

yet to be proved, but suspicion is rife nonetheless.

Second, all eyes are on whether the Office of Fair Trading will relax

its rules on the limitations of sales house revenues. The OFT has

already sounded out the industry and is now considering its actions.

Third, this will be digital TV’s first full year. Some buyers will be

looking to increase their use of the new medium and, to put it bluntly,

one medium’s gain is another’s loss. Consequently, the sales houses will

be hoping to safeguard their share. This is the year that Open will

launch interactive TV, while a host of new channels are also set to

launch. Add to this the creeping influence of the internet on our media

consumption habits and media owners could quite rightly surmise that it

is no longer a given that they are going to take the same share of spend

from advertisers, year in, year out.

John Billett, chairman of the independent auditor, the Billett

Consultancy, paints a backdrop to this year’s negotiations by

identifying three key areas: programming, scale and flexibility. These,

he says, will be uppermost in the minds of agencies when gathered round

the table. He says: ’The real battle will be fought over programming and

advertisers’ access to it. You’ll see advertisers wanting to specify

more where their advertising goes in order to provide them with the best

environment. This is going to lead to advertisers asking whether a

programme is good enough for their products. You’ll then get media

owners ratcheting up the price of the programmes that are most in


The scale of buying is another important issue, according to


’No one buyer is big enough to leverage its position but they’re all

looking to do so. There’s a growth in the number of agency arrangements

and that process will continue. They’re all trying to get greater scale

of leverage in their buying.’

The last issue is flexibility. Billett says: ’Advertisers are demanding

more flexibility from media owners. Can I move my money at the last

minute? Can I switch schedules? These things are becoming increasingly

important to advertisers as business decisions are made at shorter


Nick Theakstone, the head of broadcast at MediaVest, is faced with a

conundrum - there’s so much choice but little freedom in which to

exercise it. He states: ’In an ideal world, we could find the best

solution for our clients without negotiations getting in the way. We are

staring down the barrel of up to 200 channels and I want to be able to

try whatever one I think will be best for my clients without being

constrained by the deals.’ He predicts there will be more emphasis on

share of broadcast.

But, he adds: ’Unfortunately, that doesn’t really take into

consideration the marketing objectives of my clients. It’s not what I

would call flexible. Media owners have got to realise that share of

broadcast is not the be-all and end-all. They’ve got to understand that

we’re operating in a world with so many options and I want to be able to

choose whichever one I think is best for my client.’ As for the digital

issue: ’The take-up is not just dependent on the size of the audience

but also on the digital operators’ willingness to innovate and look at

ways of doing sponsorship deals, advertiser-funded programming and

integrated communications.’

Greg Turzynski, a managing partner of Optimedia, says the approach of

the new millennium has specific significance for this autumn’s

negotiations, which he predicts will be unusually busy and competitive.

’The hiatus in the habit of negotiating two- or three-year deals

occurred around three years ago and next year represents a natural and

common end to that. This means a lot of agencies and clients will find

themselves returning to the negotiating table after a lengthy break and

in a market that has substantially changed in that period.’

He continues: ’All commercial channels have increased their audience

volumes, particularly Channel 5 and satellite. This, in conjunction with

ITV’s ambitions to control share of broadcast expenditures, makes for a

lively season in which not everyone will be satisfied. Perhaps this

explains the rather unusual trading options being explored by the likes

of Channel 5, involving the bartering of airtime for equity in products

or companies.’

Ian Lomas, the deputy managing director of BMP OMD, says that, because

of the trend for ITV sales houses to encourage longer-term commitment

from advertisers, a reasonable proportion of the market has already been

dealt with or is under option for 2000. He doesn’t expect the same level

of pressure on annual negotiations that the market has hitherto


He predicts Channel 5 will play more of a role in schedules. He says:

’One of the clear facts is that Channel 5 should take more revenue.

Simply, it is delivering more commercial audience and has a very

proactive sales attitude, which encourages initiatives like the new

media company stock idea. The conundrum is where to get the money


Channel 5’s initiative in bartering airtime out in return for new-media

companies’ stock is an interesting trading development that may even be

considered by the other national channels. This kind of innovative

negotiation could catch out the bigger players.’

According to Lomas, another issue is the effect on advertisers with

share of broadcast deals of how ITV handles ITV2’s sales policy. ’There

are many aspects of negotiation for media value in the TV market that

are transcending the limited negotiation terms - sponsorship, digital,

ad-funded and barter being just a few.’