Speeches
Dawn Airey Speech - PROMAX UK Conference
02/11/2007
PROMAX UK CONFERENCE, 2nd NOVEMBER
2007
Dawn Airey, Managing Director of Global Content, ITV
"Liberating content and maximising value"
Intro
Good morning and thank you Martin for that kind introduction.
It’s a pleasure to open this conference and speak to you after just a month back in commercial television. And what an interesting month it’s been.
I must say I was delighted to get the call from ITV earlier this year - things seemed to be on the up at Grays Inn Road, Michael was grinning even more broadly than usual and October is generally a nice quiet time to ease yourself into a new job… a few introductory meetings, get to know everyone, then the long slow TV wind down to Christmas.
Those of you who have taken the trouble to browse my recent CV will have noticed that timing may not be one of my best assets! To join a company as the most senior executive in charge of production on the very day on which the Deloitte findings are put before the Board takes some doing.
Luckily my colleagues have a sense of humour, and the phrase ‘last in first out’ was mentioned to me on more than one occasion. As was ‘lets have a vote on it’. Terms and conditions apply.
Thankfully I’m still here. Because in truth my timing is very good. It is a genuinely great time to be in the content business. I joined ITV and took on the role of MD of Global Content because I’m excited about the possibilities for content in all its forms – online and offline - and ITV’s ability to take what we do on TV onto wildly different sorts of platforms, deepen our engagement and make a direct connection with our audience. That’s something we could never do in the past.
In fact there are so many possibilities, the biggest question facing the industry at the moment is - where are we actually going, how do we know when we get there, and does anyone have a map?
Predictably, the debate tends to get polarised. Either ‘everything we thought we knew is wrong and we’ll be lucky if we are still in business by the end of the year’. Or, ‘get a grip, 16 million people watched the rugby, I’ve just paid a couple of grand for a brand new 45’’ plasma screen, and when was the last time you sat down and watched something on a mobile phone anyway’.
It’s a choice between head in the clouds or head in the sand. Not much of a choice at all and, as ever, the truth lies somewhere in between.
What is undeniable is that the growth of broadband is having a huge and profound impact on traditional media consumption. A few quick facts:
- We are the most active web users in Europe, spending around 40 minutes online every day – up from around 15 minutes less than 5 years ago. Add that to the increase in the time we all spend commuting and it’s no wonder Britain’s birth rate is declining dramatically.
- Two thirds of all children in the UK say they could not ‘live without’ a mobile phone or the internet. And in Korea, 52% of 3-5 year olds are already on the web. Probably online banking.
- American motivational speaker, Judson Laipply’s dance masterclass is still the most watched video ever on You Tube with more than 60m views in a year. And in just two weeks the new single from X Factor’s Leona Lewis has picked up almost 3 million views – helping send it to number one in music charts. Leone’s next video, featuring a motivational dance masterclass will be even more popular.
Some of you may have stumbled upon Facebook – remember that’s the thing you fit your work around in the office.
Others, like me, who think poking someone in the office has an entirely different connotation, need to get our mind around some seriously big numbers.
Last week Facebook was valued at around $15billion. The staggering fact is Facebook only expects to make around $30million profit this year – a pretty incredible multiple in any ones book.
As this audience knows better than most, these trends are being driven by changing consumer consumption – people want their content on tap and they want to be able to bend it, shape and share it with their friends.
So how can the likes of ITV1, Channel Four, or even NBC and Fox compete with that? In a sense they can’t. The broadcast model was never intended to be a wellspring of audience creativity. It’s a one-to-many model, rather than the other way round… unless you count Jim Royle shouting ‘my arse’ at the screen in The Royle Family as creative interaction.
This not to say that television is irrelevant. While Bebo rightly celebrates the fact that Kate Modern got 7m views online in 5 weeks, ITV1 achieves that onscreen at least twice a day. Sites like You Tube owe a huge debt to our entertainment industry. We provide, legally or otherwise, the vast majority of their top clips. With over 30m views, one of the most popular You Tube clips of the year is not a piece of UGC, it’s Paul Potts on ITV’s Britain’s Got Talent.
Television remains at the heart of any entertainment business and will for many years to come. And while ITV1 is still the UK’s most effective brand builder we own a springboard from which we can launch content brands onto multiple platforms and into multiple territories.
So from an ITV Productions perspective the challenge is clear. We’ve got to improve our hit rate, pump the oil through the pipeline, and get more of our own shows fueling the creative engine that is ITV. Think of us as sort UK TV Gazprom but without mafia connections, east eurpoean hookers and dodgy football cubs.
The announcement that ITV wants 75% of all commissioning spend to go in-house may sound like a producer’s wet dream, but unfortunately it’s our target and not theirs. Simon Shaps’ and his commissioning team are under no obligation to take content from us, and the truth is it wouldn’t work if they were. They have to pick their shows on merit. I’m hopeful that with a new focus and new resources, ITVP can deliver the hits Simon needs for the network.
360 degree commissioning - liberating our content
But TV can only be the starting point. For free-to-air broadcasters, if you don’t own the rights to your content you only have one source of revenue – advertising. In the old days, the only additional revenue you could get from a show was from repeats – it’s the principle behind the wealth of +1 digital channels appearing on our screens. But today the revenue opportunities from content are limited only by your imagination and your energy.
From now on it is going to be a lot easier for my team to pitch a show if we can demonstrate to the network that we have already completed a comprehensive 360 degree analysis which shows how much secondary revenue we plan to make for the company online, internationally or through merchandising off the back of the network broadcast.
360 degree exploitation is one of those concepts that has been around for so long that it almost sounds like a cliché. In truth the phrase ‘360 degree’ now feels old fashioned, like something out of the era of the ‘Information Superhighway’. In the US they have already supersized it and instead of 360 degree feedback they now do 720 degree feedback. That’s where, as well as your work colleagues, Personnel go and ask your neighbours what they think of you. I live in that rather unlikely media dormitory town, Oxford, so I guess neighbours and colleagues are the same thing really and I have little to fear from 720.
But if you are serious about working in the content business today, 360 degree exploitation is the absolute minimum. And unfortunately it’s not something that any of us in the UK television industry have been particularly good at in the past – there are some notable exceptions of course. This is partly because the onscreen and online worlds have, until recently, existed in completely different spheres.
The former editor of Wired, John Battelle, has summed up the challenges well. Battelle has dispensed with the tired ‘old’ and ‘new’ media tags and has come up with descriptors that pinpoint the differences between the two spheres, which he calls “Packaged Goods Media” and “Conversational Media”.
“Packaged Goods Media” are the companies most of us here work for. They own and control content and distribution and have established business models based on highly evolved approaches to advertising and subscription. Each of these pillars is essential to these sorts of companies because the very business of maintaining the infrastructure, let alone creating new content, is a massively expensive enterprise in its own right. Packaging and distributing the content is also hugely costly. Indeed in some cases they can outstrip the investment in creating the content in the first place.
Think about that for a minute.
When you spend tons of capital to create and then distribute intellectual property, you must control that property in order to justify your capital expenses. It’s no wonder there are so many lawyers working in TV.
Enter then the new world of social media, or as Battelle calls it, “Conversational Media”. It follows a completely different economic model. A website like YouTube or FaceBook doesn’t create content. It doesn’t control distribution. And it’s not in the business of marketing anything either. Here the fundamental pillars of Packaged Goods Media are virtually nonexistent. All that matters is constructing the coolest platform imaginable, with the catchiest name, around which others want to congregate and converse. And it’s the conversation between users that is the content. Endlessly self generating and endlessly creative. The perfect mobius strip of content.
Two very different worlds with two very different philosophies. It’s no wonder conflicts arise between the two and I have no doubt they will continue to arise.
The knee-jerk reaction from most ‘packaged good’ companies had been to get heavy – lobbying passionately for protective legislation or new technological barriers that make it harder for users to access content in the way they want. For all their Ian Curtis t-shirts and Amy Winehouse hair dos the music industry very un-coolly tried this tactic and it’s still living with the consequences.
Most media companies have learnt from their music company counterparts and have come to see You Tube as a valuable resource – essentially free advertising. And clips that the network themselves upload can even be topped and tailed with 15- or 30-second pre-roll commercials which some studies suggest have a much higher recall than conventional TV ads.
I strongly subscribe to the view that engaging in that conversation between consumers is what really matters in the hope that letting people play with 2/3/4 minute clips will in the end drive them to the long-form content. But if people want to watch whole shows then they should be able to see them in high quality, preferably through our own media players or Video On Demand services. A bite between meals doesn’t ruin your appetite.
So we have to use these sites, not be used by them. Which is great as ITV now has a world class broadband site. Re-launched by Jeff Henry’s team earlier this year, we’ve gone for free model which gives consumer’s immediate access to streaming, catch-up and archive content; and gives our advertiser’s access to thousands of hours of quality video to wrap themselves around in a mutually profitable embrace. We’ve made a good start, but I want us to liberate our content even further. Because, in the end, opening this stuff up and letting people use it and play with it is as much in our interests as it is in the interest of consumers. It’s the old railroad and shovels argument for the digital superhighway. We just need to humility to see that what we are is part of the content chain, not the thing at either end of it.
It’s a lesson that, as ever, the US are quicker to learn than most. I am told that American Idol and House the only two shows that really deliver any significant profit for Fox. What they are tremendously good at is exploiting these brands on multiple platforms, liberating the content and creating revenues which help them balance the books and innovate in other areas. Though even they must fear running out of undiscovered 60 year old housewives who can sing It’s Raining Men and rare life-threatening diseases that mask their true nature behind symptoms that only a doctor with severe psychological problems of his own can diagnose.
But no wonder Channel Four are constantly banging on about their need for an in-house production base. A shop window can get you viewers, footfall, but it’s the content that really drives the revenue.
Hells Kitchen is a good example of where it has worked well for ITV Productions. Nearly half the show’s revenues have come from outside the UK TV market – through licensing and merchandising, international production and format sales – making Hell’s Kitchen a £50m global brand franchise. The programme returned to ITV1 this autumn and is about to go into production for its 4th season in the States. But even £50m pales into insignificance at the amount being churned out by the Lost and Desperate Housewives franchises. ITV Worldwide have been growing at a respectable 10% each year but these still lack true scale by international standards.
A significant part of our problem has been structural. Until last month our UK and international content businesses operated as separate units. The result is we have not maximised the opportunities that we should have done. So that’s why we have now integrated our international production, sales and licensing with our UK production business to create a unified Global Content Division.
We have a huge opportunity here. The global TV market is growing fast and the appetite among global audiences for British formats is strong and getting stronger. So we are deliberately shifting the focus of our output to programming that has the greatest potential for proper exploitation. All our talent and financial resources are being targeted on content that will have the greatest lifetime value to ITV.
Brand managers for ITVP shows
A key area where we can develop our 360 degree thinking is in our brand marketing.
Marketing used to be an ad hoc sleeping beauty department, waiting to be activated by the needs of the business rather than functioning as a key strategic competency. There was a time when it was enough to rely upon our own airtime to launch shows, and drive viewers to our programmes - make good shows and the audience will come, make bad shows and they will probably come anyway.
Fast forward to 2007 and the world is very different place. As the UK’s biggest brand builder, ITV’s airtime remains a hugely effective way of driving viewers to our shows and content. But with hundreds of channels, downloads, websites, and computer games all competing for the audience mind space, we have to work far harder to hold their attention, let alone their imagination. ITV has a wide variety of channel brands that our teams manage brilliantly on many platforms, and our channel brand positioning is critically important to their success. But increasingly we need to consider programme brands as well.
A show like Lost is a powerful brand, with a recognisable logo, positioning and communications strategy that exists outside the transmission window. While not every show is a Lost we can employ that strategic approach more widely to prevent value leaking out of the lifecycle of our own shows.
We’ve already created a great web campaign in Emmerdale around the death of Tom King last year – a really successful brand extension with hundreds of thousands of Emmerdale fans following online. But what about going further and building the village online, allowing viewers to totally immerse themselves in the soap between episodes. Go and live in the Dales, meet your favourite characters – you could even have a cyber affair with a Dingle. That’s a family from Emmerdale by the way, not some kind of Facebook widget – although we will be doing that as well.
Or take one of our hugely popular daytime shows, Loose Women. Our panel of Loose Women discuss the issues of the day, ranging from kids as judges to men dancing at weddings – something that certainly keeps me up at night. We’re already giving viewers catch-ups and debates at ITV.com. But we have a unique chance to build far richer community sites, tapping into the network of millions of women who watch the show and want to carry on experiencing the brand after transmission. And who want to move from passive to active sharing of that experience. That’s the critical bit.
TV used to collude in the notion that Britain is a nation locked up in its own reservations. It was in our interest for the rain to fall and for people to stick indoors and watch whatever ITV or the BBC chose to put out. But whether it’s because of globalisation or global warming, Britain has changed. I’ve even seen pavement café’s in Gateshead for god’s sake. We are now a nation that socialises with itself on line and likes to define itself by that socialisation. So in the new digital Britain some of us are proud to be loose women and we want to talk to other loose women about the things that make us loose women. And if ITV owns and mediates that particularly lively pavement café then we own an incredibly valuable bit of virtual real estate. In Pounds Sterling not Linden Dollars.
We have made some great progress, but need a step change in both the ambition and execution of our brand exploitation. Working with Rupert Howell and David Pemsel, I want to look at establishing individual programme brand managers around some of ITV Productions’ biggest shows. Senior people within ITV, given overarching responsibility for the exploitation, and liberation, of individual programme brands across platforms and territories. We need to bring the best marketing brains and brand managers in the business together to take a truly 360 degree approach to our biggest shows. We need to leverage the hell out of them to deliver the value which is, more often than not, going to waste - maximum opportunity plus maximum leverage equals maximum value.
Attracting the best talent
Getting the marketeers and brand managers working on our shows – and getting them in at the start of the creative process – is critically important. But even more important is improving our ability to recruit and retain the best production talent to generate the programme and content ideas in the first place.
The old world of production was pretty simple when it came to talent – they were employed as contract staff, or the network bought from them as independents. But this model – you’re either inside or outside - doesn’t fit the way everyone wants to work. Talent just isn’t easy like that. If it were we’d all be Michael Forster or John Thoaday. So ITV needs to be more flexible in the way that we engage that talent.
We are rolling out new commercial structures which give the best talent greater flexibility and a more generous deal, but allow us to keep control of the rights created. This way we can attract some of the independent talent who may never have normally considered coming to work at ITV. True, they can still go out and set up their own Indy, but not everyone wants to spend their life on VAT returns and working out Alistair Darling’s new capital gains tax. Our new structures give programme makers the benefits and support of a large organisation, but with a more flexible and independent ways of working. If we get this right we can change the perception of ITVP into a truly creative, innovative content house – somewhere the best in the business want to come and work and share their ideas.
The production market is extremely healthy at the moment - and I want us to be the healthiest part of it. So I’m getting my chequebook out (well actually it’s a joint account with Michael Grade). We will make targeted acquisitions of quality indies to help bolster our production capabilities. I must say its not often you get to announce a shopping spree, and I love shopping as much as the next person, but sorry guys we’re not writing blank cheques here. We’ve got around £200m to spend and we’re focusing on the high-value genres with strong secondary sales potential.
ITV needs to become a beacon for talent one again. As I said, I want people who may never have considered coming to ITV before to bring us their best ideas. But I’m not presumptuous enough to assume that all those ideas will come from people working in television.
One of the things that has always struck about some of the people posting original content on You Tube is that they don’t actually want to be on You Tube. They want to be on television. I want to harness their creativity and there is no reason we cannot pick up good ideas and people from the web. And I know this is a key area you are looking at in the next session of the conference.
True for every multi platform prince, there are a thousand digital frogs. But as consumer technology becomes both cheaper and more sophisticated, the ability for budding programme makers to produce quality content online is increasing dramatically. So before you say it – this isn’t just a cheap way to recruit student producer/directors, or some kind of You’ve Been Framed rehash – it’s about having an attitude that is open to the best ideas, wherever they may have come from, however fuzzy their edges.
Trust
You can’t expect me to make a speech like this without mentioning the ‘T’ word and saying something about trust and some of the issues the TV industry has had to deal with recently.
Between us, the BBC, Channel Four and ITV have had what you could politely call an annus horribilus (and I’ve checked, I’m definitively quoting the Queen accurately there). And we’ve still got a couple of months to go till 2008. This year the media spotlight shone into the darkest corners of the industry and what’s been found is not just deeply careless but deeply unsavoury, particularly in relation to premium rate services.
The rise of interactive television and the huge growth in broadband are part of the same phenomenon. It’s part of the evolutionary process of broadcasting, as previously passive viewers become active consumers of content. When it came to interactive TV – we let people in, and they came to us on trust. They interacted, enthusiastically, in their millions, fully expecting to get exactly what we offering them. And why should they doubt us? You can trust TV, it’s the newspapers you’ve got to worry about - or so everyone thought.
As Michael said last month – in key production areas, through this commercial transaction we ceded sovereignty to the viewers. But then we failed to respect that sovereignty. Viewers were overlooked, and in some case overruled. There is absolutely no excuse for happened and there can be no excuse for these kind of mistakes in the future.
It is not just ITV. The whole industry is having to pick up the pieces of these mistakes and regain its trust with the audience. The damage has been considerable but I don’t believe that our trust with the audience has been irreparably damaged. The reparations that all broadcasters are undertaking will establish our intent. Then it’s about the industry having the courage to pick itself up and win back the trust, and eventually the affection, of the audience.
We’ve got to have the humility to learn the lessons, but also the strength to move on. I don’t mean that we should be in any way complacent about what has happened, perish the thought, but it is in all our interests – the audience included – that we move into 2008 confident and positive, together, about our future as an industry.
Conclusions
Over the next two days this conference will be looking in depth at the creative opportunities of the ‘near future’ - it’s a suitably vague timescale for an area where no-one really know exactly where we will be next year, let alone in five years time.
For those of us working in broadcasting our job is to try and map out the path into the future. And even if we end up lost on a sat nav B road, with a trailer in tow, at least we’ve had a go. And possibly even a fun journey.
I’ve recently become the proud parent of a beautiful baby girl.
In Rupert Murdoch’s phraseology she’s a digital native whereas those of us in this room are all digital immigrants.
My daughter is never going to experience a world without always-on broadband connectivity. She’s never going to have to wait until 7:30pm for her favourite show. In fact, her favourite show might be a multiplayer game or a two-minute-long interactive drama like LonelyGirl15. To her CDs and DVDs – not to mention her parents – are going to be funny-looking relics of a bygone age.
But I know, whatever the gadgetry of transmission, she’ll still be seeking out content that grabs her imagination. Where other parents rightly worry about what kind of real world, what kind of planet their children will inhabit, I worry what kind of digital world she will grow up in. I want her to have the best, the most affecting, the most intense relationship with her digital world. Just as I did with my more limited analogue one. And for that she needs to have her imagination fed by the finest writers, producers and talent out there. And that’s why I fundamentally believe in the importance of television and the importance of ITV. We need, but more importantly she needs, a company in which someone will take the really big bets on content and the people who produce it.
Thank you for listening, and I’m happy to take questions.