Analysis: ITV gets serious about broadband

Revolution

01/02/2007

ITV has upped its commitment to broadband with the appointment of media industry heavy-weight Annalies van den Belt as managing director of its growing broadband team.

The broadcaster, which plans to launch its new broadband service by April, describes Van den Belt's appointment as "a hugely significant step".

She joins from the Telegraph Media Group where she was director of new media, prior to which she spent five years at News International where she launched Times Online.

Van den Belt's remit will cover all aspects of commercial and operational delivery for the broadband web site, including advertising and transactional revenue, content production and commissioning.

Her move follows another key appointment, late last year, of industry veteran Mohammed Raja as managing director of the local broadband service.

While Jeff Henry, ITV consumer chief executive has said that "plans for our broadband are ambitious and well advanced", the broadcaster remains tight-lipped about the new service.

ITV has announced that the broadband portal will feature free streaming content from its four TV channels, including ITV1, live, along with "simulcasts of ITV's broadcast channel output, catch-ups, previews and downloads of key programmes and exclusive online content".

The free content separates ITV from other players, including Channel 4, whose 4OD service charges viewers to watch catch-up programmes. However, it is understood that ITV viewers may incur a fee to view sports and 'unique' programming.

According to Van den Belt, ITV is spending £20 million on the new broadband portal, which suggests that there will be a lot of pressure to get the infra-structure right.

SENSIBLE MOVE

Nigel Sheldon, director of digital at media agency Starcom, says the launch was a "sensible move" for the broadcaster. "Generally, the whole market is moving towards video and audio content via the web and a number of providers are setting up services. Of course, their competitors are also doing so.

"Another thing is that consumers are taking to this as well and have a real appetite for it. From ITV's point of view, for a broadcaster that has compelling content within its brand, it makes sense for it to use it and deploy it across various platforms," he adds.

BIGGEST DIFFERENTIATOR

Sheldon believes free content is "clearly going to be one of the biggest differentiators".

He explains: "User take-up issues are all about quality of content, pricing and the ability of technology - that is, if users can access it easily. If (ITV) can match those and more, then it should be in a good position."

Jeremy Hill, partner at Circus Street disagrees, and says ITV needs to offer viewers value-added content that they cannot source themselves online.

He says: "It really depends on what ITV is going to do, but, if it's just about distributing and promoting the TV channels, I think that's going to be really weak. That reeks of them using it as a promotional tool rather than a core product.

"If they are using it as a marketing channel they're missing the point a bit," he adds.

According to Hill, one problem for big media companies is that they are struggling to move away from old media models and really understand the new digital structures.

"Media companies are beginning to realise that they are not in the TV, press or radio business any more, but in the news and content business," explains Hill. "It will be interesting to see what ITV does and whether it continues to go down that TV visual market."

TOUGH TIME

The BBC and The Guardian have started to take this road through podcasts and other formats and Hill believes ITV needs to follow suit. "If they keep thinking 'we are a TV company', I think they are going to be in for a tough time," he adds.

This vision is already evident in ITV's programming and new shows like Tycoon - a reality show that has been called a hybrid of The Apprentice and Dragons Den - where contestants are asked to create and run a business, with the audience to vote for the best one.

ITV plans to use the new broadband portal to recruit contestants. It will create online profiles using user-generated content, as well as providing additional footage from the programmes online. It will continue coverage via the portal after the show completes its run on TV.

ITV is also experimenting with programmes such as Coronation Street and Emmerdale.

ITV is expected to feature user-generated content and many predict that it will take advantage of its ownership of Friends Reunited.co.uk and the site's extensive database to drive users to the broadband portal.

It will also use its ITV Local service to offer localised content, particularly online classifieds, providing local listings including jobs, homes and cars, and information for the various regional areas.

Unlike other broadcasters' services, such as Sky and 4OD, ITV's programming will include commercial breaks and will be funded by ads. But, how attractive will the service be to the advertisers?

MORE FACTORS

"ITV's content has generally been attractive and a lot of advertisers have wanted to get involved. There is no reason why that shouldn't translate to the web," reckons Sheldon.

However, he adds that advertisers will have to think about a lot more factors when it comes to advertising on the new ITV portal.

Starcom in the US has been undergoing research into advertising on IPTV, which looks into factors such as the length of ad formats (pre-roll, post-roll or embedded in the content), what creative is appropriate for the environment and the context in which viewers will see the ad.

"There are a number of considerations and challenges that advertisers are tackling and that's in the more mature markets like the US," continues Sheldon.

"Those who grasp it and exploit it will do well. One thing is certain: the trusted brands, which people want to interact with, will be in a more advantageous position."

ATTRACT CONSUMERS

According to Van den Belt, "ITV's strength as a brand and as a content owner is unparalleled in the commercial space", and now the onus is on her to create an attractive commercial portal that will attract consumers to supplement the TV station's falling ratings.

Research from broadband company Tiscali revealed that nearly two-thirds of UK adults would prefer to view on-demand programmes on their TV set via a broadband connection, than watch traditional TV scheduling.

The research also revealed that 17 per cent of UK adults have already downloaded content to watch on their TV set.

The study by Tiscali coincided with its announcement that it is to launch its own IPTV services in what is becoming a cluttered marketplace following the launch of BT Vision last year, BBC's iPlayer, which is still undergoing trials and last month's unveiling of Apple TV.