Greg Dyke on Broadcasting

Commercial television isn't dead yet in spite of PVRs

If you listen to some experts the long term future of advertiser-funded television channels such as ITV, Channel 4 and Five is, once again, suddenly in doubt because of technological change.

If you listen to some experts the long term future of advertiser-funded television channels such as ITV, Channel 4 and Five is, once again, suddenly in doubt because of technological change.

The argument goes that ownership of personal video recorders - so far available in the form of Sky Plus - is going to take off in vast numbers and, as a result, many more people will record programmes rather than watch them as they are broadcast. When the viewers finally get around to watching the programmes they will spin through the advertisements.

I was recently chairing a Marketing Week advertisers' conference in Paris where this was the popular theme of the day and was widely used as a means of knocking the broadcasters. For me the trouble was there was a sense of déjà vu about the whole issue, I had heard it all before. It was getting on for 20 years ago that I last attended this particular conference. At that time I was a young director of programmes at London Weekend Television and one of my jobs at the conference back in 1988 was to convince the advertisers that ITV had a bright future. It wasn't that easy.

It was the year that another technological change, multichannel television, was about to hit Britain in the form of Sky and the defunct British Satellite Broadcasting. The advertisers and the buying agencies were full of stories of doom and gloom for ITV. According to them, real competition was about to hit ITV for the first time. Their argument back then was that more channels and real competition would lead to a dramatic fall in the price of advertising. After all, wasn't that how markets worked?

Of course, that isn't what happened. More channels didn't lead to more people watching advertiser-funded television and, as demand grew, the price of advertising on the big terrestrial channels went up rather than down over the next decade both in Britain and the United States. So this year's argument about a great technological change about to destroy the economics of an industry had a familiar ring.

So what does the evidence about PVRs show us so far? Well, it certainly shows that some viewers spin through the ads if they get the opportunity to, making the advertising less effective. But it also shows that viewers, on acquiring a PVR, tend to watch more television overall to balance this partially.

What the evidence also shows is that people with PVRs tend to watch certain sorts of programmes live, programmes which lose their relevance if recorded and watched a couple of days later. So news, sport, soaps and reality shows are much more likely to be watched live while films, drama and comedy are more likely to be recorded.

As the use of PVRs grows, the schedulers and commissioners of commercial channels are likely to change the mix of their output to do more "live" and "event" programming - which will be popular with their bosses as this sort of programming also tends to be cheaper to produce.

But it's not only the broadcasters that are likely to change. The advertising community is also looking at how it should adapt in the face of the threat from PVRs. Longer and better quality ads are likely and there will certainly be a premium paid to be the last ad in the break because it's more likely to be watched. And the coming of product placement is bound to happen in the UK this decade, just as programme sponsorship came in the 1990s. However, all is not bleak for commercial broadcasters. After a day of warnings at the Paris conference that the end is coming for traditional broadcasters, up stepped Sue Chidler, the marketing director of Levi's Europe. She made it very clear that for her company having a period of three years when they didn't advertise on the mass broadcasters had been a disaster. She didn't care about PVRs; she wanted great ads and big audiences to play them to. Maybe change won't happen quite as quickly as many predicted after all.

Cabinet's loss turns into McTaggart's gain

The organisers of this year's Edinburgh Television Festival must have been relieved when Tony Blair announced the names of his new Cabinet; relieved not because of who was in the Cabinet but who wasn't. Some weeks back they announced that John Birt, the former director general of the BBC and adviser to Tony Blair, would deliver this year's McTaggart Lecture, the most prestigious lecture in the television calendar. But what John was secretly hoping for, and had told friends he expected, was to be promoted into Blair's Cabinet as the "enforcer in chief". But if he'd got the job he wouldn't have been able to deliver the McTaggart. So what happened? Clearly Mr Blair decided that promoting John Birt over the top of a whole range of "proper politicians" was simply a step too far for Labour, given that his new majority was nearly 100 down on the last Parliament. So Labour's loss is the Edinburgh Television Festival's gain. What is certain is that Lord Birt's lecture is likely to be more intellectually rigorous than some McTaggarts in recent years.