Media Forum: Will web TV alter advertising?

How will advertising models adapt to on-demand TV content, Alasdair Reid asks.

According to some of the media industry's more excitable commentators, British broadcasting was killed off by the BBC on 25 April 2006. The occasion was the Royal Television Society lecture delivered to a Cavendish Conference Centre audience by the BBC's director-general, Mark Thompson, in which he outlined his vision of the technological future.

Within five or so years, he predicted, the BBC's existing broadcast content will be accessible and downloadable in digital format across a number of platforms, from satellite and cable video-on-demand through mobile to the good old-fashioned internet.

At which point the BBC, according to many analysts, stops becoming a broadcaster and becomes a publisher. It will be in the business of narrowcasting and there will be no need whatsoever for the linear television schedules that have structured the audio-visual industries for the past 50 years.

And, of course, where the BBC leads, others follow - if they are not already miles ahead, that is. Disney and its US network, ABC, have been offering first-run mainstream downloadable content for months now and on this side of the Atlantic, BSkyB and Channel 4 have been pursuing this with great gusto.

Channel 4's chief executive, Andy Duncan, is known to be an enthusiast for new distribution technologies and he must have been pleased back in March when its first large-scale experiment - making a sitcom, The IT Crowd, available on the internet - was such a success, with 371,000 downloads.

Now it is heavily promoting the availability of an even hotter property, Lost.

Channel 4 has to develop a mixed-economy model, deriving revenues from pay-per-view or subscriptions (in the US, pay-as-you go systems based on the iTunes model look like prevailing), as well as advertising.

Rob Henwood, the new-business director at Channel 4, says it is too early to be definitive about whether the industry will have to develop new types of advertising - but he points out that this is a unique new opportunity.

It can, for instance, be a hybrid medium running ads with a trackable response mechanism.

He says: "Advertising has a big role to play and in the short term, I'm sure there will be a place for (conventional) TV ads. Spot and break bumpers will have a role to play. No-one knows what the optimum model and mix is. Every new platform spawns new ways of execution and this one will be the same."

But all this presupposes significant numbers of people are likely to access their favourite TV programmes in new ways. Are these recent initiatives merely about technophiles showing off for their own amusement? Or will they become a significant phenomenon?

There are, of course, many enthusiasts in digital agencies. Robert Horler, the managing director of Diffiniti, says this is a significant departure point - and the advertising industry should be prepared to take advantage.

He adds: "I'm sure in the short term we'll see lots of streamed branded advertising, but we will also need to see new advertising models evolving. Long-term, the model has to be derived from online advertising. The thing about many programmes is that if people want to download them then by definition they are fans - and the sorts of programmes that attract fans tend also to create a lot of other noise on the internet. Advertisers will need to find ways of linking into that."

But Chris Hayward, the head of broadcast at ZenithOptimedia, is rather more sceptical: "The future of TV is still about a schedule you can dip in and out of. Where new technology is concerned, things such as high-definition TV are probably more important. What Channel 4 is doing is exciting, and it is ensuring it will not just survive but be a strong player (in the digital environment). People will have to embrace it. But it's like the whole personal video recorder thing - it's not going to change the whole industry overnight."

Andy Benningfield, the head of TV at BJK&E, suggests we may be asking the wrong questions here. He explains: "I am less worried about its ability to engage and appeal to a broad range of new users. I have far more concern over how (new delivery mechanisms) can be engaging enough to be of value.

My concern has always been how best to use new technology and ensure we are using it correctly, based on its ability to deliver engaging, relevant content. We are constantly looking at new ways to engage with consumers and make our commercial messages more resonant."

YES - Rob Henwood, new-business director, Channel 4

"I think it will grow as we are able to show the value of this opportunity. The biggest single (new benefit) of advertising in an on-demand environment is that advertisers will be able to track and measure response."

YES - Robert Horler, managing director, Diffiniti

"It's a precursor to full-scale internet protocol TV, where everything you watch will come via a hard drive in your living room. IPTV is to downloads as broadband is to narrowband - it will be a significant factor in four to five years."

NO - Chris Hayward, head of broadcast, ZenithOptimedia

"We have to keep this in proportion. It will be an interesting opportunity to expand the TV experience, but the TV experience is less about watching on a mobile than watching football in front of a big TV with your mates with a beer."

NO - Andy Benningfield, head of TV, BJK&E

"No doubt all these new technologies will find audiences. I am not convinced any of the platforms can replace TV in terms of its ability to create impact, but we have to ensure what we do is engaging enough for consumers to absorb."

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