Media Week

Ofcom's investigations into public service broadcasting have been going on for as long as the hills.

It began its first review in 2003 and released its latest blueprint for the future of PSB provision last week. The Government will now use this document, allied with Stephen Carter's imminent Digital Britain report, to shape proposals for the future of UK broadcasting.

The regulator's blueprint will be incorporated in Digital Britain and the final draft of Carter's report in June will outline the Government's response to Ofcom's recommend­ations and dictate what changes are needed to the Communi­cations Act. Ofcom is adamant that action is needed within the next 12 months, as the current model is "unsustainable".

Britain's major broadcasters have come out of the process well. ITV, buoyed by the Office of Fair Trading's positive noises last week about easing the contract rights renewal mechanism, will benefit further from a relaxation of its PSB commitments - to the tune of about £40m - to add to a possible £40m CRR windfall.

And Channel 4 boss Andy Duncan feels he has got what he has been pushing the Government for: a recognition that its current business model is unsustainable and help with forging partnerships - or even merging - with BBC Worldwide or Five. Indeed, C4 is already in informal negotiations with BBC Worldwide about ways they can work together, no doubt prompted by the Government, which makes a tie-up with Five the less likely option. For its part, the BBC may have swerved top slicing the licence fee.

However, the developments may not be such good news for media agencies and advertisers. A further consolidation of TV sales points will help persuade ITV it can be more aggressive in its trading stance and also bolster Channel 4's negotiating position.

Broadcasters have obviously been doing an excellent job lobbying government. Perhaps it's time clients and agencies upped their game and got in the ear of Carter, whose influence can be read between the lines of Ofcom's recommendations and whose Digital Britain report will further entrench his ideas in the framework that will shape the future of Britain's media landscape.

Times might be tough in media but the top players in the agency community are still more than happy to pay themselves juicy salaries, according to a new report.

Accountancy firm Kingston Smith's Financial Performance of Marketing Services Companies 2008 shows the top-paid director at Media Planning Ltd earned £1.4m in 2007, 72% up on the previous year. Mindshare UK's top earner took home over a million pounds as well (£1.02m).

In comparison, the top earners at MediaCom UK, Mediaedge:cia and ZenithOptimedia took home a relatively measly £245,000, £311,000 and £341,000 respectively - though the MediaCom figure was for 2006. However, MediaCom UK did pay the highest total amount of money to its directors, at £4.7m.

Aegis Media turned over £1.3bn in 2006, for pre-tax profits of £35.6m. It paid its directors £2.7m, with £608,000 going to its highest-earning director.

The smaller agencies don't necessarily pay lower wages. Specialist financial agency Ptarmigan Media, number 28 on the turnover chart, paid its highest earner a lip-smacking £843,000 in 2007 - presumably founder and managing director David Wiggin - though that comprised virtually all of its overall director payments. The top earner at Mediavest Manchester also kept the wolves from the door, with remuneration of £618,000 in the year to the end of February 2007.

Initiative paid its top earner £449,000, OMD Group £430,000, Kinetic Worldwide £418,000, MEC International £415,000 and Walker Media £363,000.

Of course, the really interesting question is: who exactly are these high earners at each agency...?

On page 108 of last week's preliminary response on ITV's contract rights renewal obligations from the Office of Fair Trading, there is a mind-numbingly complicated formula that explains the "CRR Ratchet".

It looks complex enough to make Einstein's hair stand on end, let alone ITV executive chairman Michael Grade or media agency bosses.

But it is crucial to the future of TV trading and advertising effectiveness. The OFT has taken a year to come up with a series of alternative proposals for dealing with the mechanism, with a bias towards easing CRR that has, understandably, gone down well with ITV.

Grade believes CRR places a dead hand on the TV market-place, but the majority of advertisers enjoy its protection. However, as well as protecting clients, media regulator Ofcom is duty bound to create favourable conditions for broadcasters to flourish, and ITV argues CRR threatens its very existence. For their part, advertisers and ITV's competitors say the abolition of CRR is an acronym for "ITV increasing its prices".

A key point is the rolling over of contracts dating back to the setting up of CRR when Carlton and Granada merged in 2003. This protects advertisers, but is increasingly unrepres-entative of a TV market that has altered exponentially in the intervening six years.

The original 2003 Competition Commission review iden-tified areas that needed addressing, such as station average price, umbrella deals and group deals. The OFT seeks to enshrine group deals in its proposals, which won't go down well with smaller clients and agencies less able to compete in the rarefied atmosphere of big agency deals. But group deals and station average price don't represent the same protection for advertisers as the rolling over of contracts.

One severe weakness of the OFT inquiry is that it only covers ITV1, not its digital channels. However, the OFT and Competition Commission can't extend the remit beyond what was originally put before them, so the parameters of the inquiry become more of an anachronism as time goes on.

Informed sources suggest ITV will benefit to the tune of at least £30-40m if CRR is dropped. But do advertisers and media buyers trust ITV to behave honourably if it is removed? They recognise the need for a strong ITV, but not one that will come back and bite them. The lessons of history suggest those outcomes are mutually incompatible.

The "KGB man taking over the Evening Standard" tale continues to rumble on, with much prompting from the Russians through the national press, which, incidentally has thoroughly annoyed the denizens of Derry Street and made them much less well disposed to finalising the deal.

But it seems more likely than not that something will be finalised next week, with the Russians, at least officially, backtracking a little on their PR offensive to try and push it through.

Further to my point in this blog last week about the Daily Mail & General Trust failing to disclose the bid to the stock market, it seems the Standard is not regarded as something that would have a "material" impact on its share price if a bid was received, or perceived as a "considerable" or "substantial" part of their business. If it isn't, DMGT is within its rights not to disclose it to the City.

The depressing part for those working on the Standard, or for those who support paid-for newspapers, is that the London evening paper isn't deemed to tick any of those boxes. In other words, it has become an irrelevance, which is presumably why Lord Rothermere is prepared to listen to the overtures from the Russians, even though it might go against his natural instinct or sentiment.

However, don't be completely surprised if there is still a twist or two to come before this one is finally played out.

At this time of year, thoughts naturally turn towards renewal and rejuvenation. Fresh starts for a new year, dry Januaries, detoxing, job-hunting and defining goals for the year ahead are the order of the day.

Of course, within a couple of weeks most people are back on the rollercoaster and riding the wonderful wave that is life in the commercial media sector and time zips by before another year comes to an end - with us all wondering where it's gone.

But the issue of work/life balance in our industry is a serious one and worthy of a pause for thought, especially as we embark on what will be a tricky and challenging year.

This week's feature profiles a typical day in the life of three media professionals and provides a snapshot of the pressures people in our sector face on a daily basis.

Of course, as Media Week columnist Tess Alps points out, anyone who comes into media needs to understand it's not a nine-to-five job. It's a work-hard, play-hard environment and the late nights preparing for pitches, dealing with clients and revising sales budgets are counterbalanced by the opportunities to experience things people working in other industries can only dream about.

But juggling family commitments with the long hours and stringent demands of working in the media sector is increasingly problematic. And younger staff whose lifestyles and mindsets are better suited to long hours can start to feel as though they are on a never-ending treadmill rather than an exciting adventure.

In the current climate, with job losses and rationalisation the order of the day, it's tempting for media agencies and media owners to put their graduate recruitment schemes on hold and suspend their ongoing staff development programmes. But this is short-sighted.

It will put extra pressure on existing staff and mean media companies are ill-prepared to come out of this recession with their businesses in the right shape to really renew and rejuvenate.

Media must continue to sell itself as an attractive sector in which to work and make a career. Now more than ever, it has to be in there pitching to attract the brightest people into the industry.

Tomorrow's print edition of Media Week contains an interesting interview with Tim Brooks, managing director of Guardian News & Media, in which he is forthright and trenchant about the future of print media.

As The Guardian settles in to its shiny new headquarters in King's Cross after finally taking its leave of its Farringdon home, Brooks admits he will never launch another print product and predicts that a number of newspaper and magazine brands will disappear in 2009.

Of course, The Guardian has long been a strong advocate and forerunner for digital media and its web presence is one of the most comprehensive and established of all the national newspaper sites. The knockers will say it has found it easier to do this because the paper isn't subject to the same commercial discipline as its rivals, given that its unique ownership structure means the paper doesn't have to make a profit as a stand-alone operation. But it has undoubtedly shown the way forward for other nationals, which are gradually catching up. As discussed previously on this blog, making enough money out of these operations to replace the print ad revenues that have disappeared from newspapers over the past few years is another challenge entirely.

Anyway, check out the interview with Brooks in tomorrow's (print) edition of Media Week, or access it online at http://www.mediaweek.co.uk/, and let me know what you think.

I see the national newspapers have today all picked up on the story of Russian oligarch Alexander Lebedev supposedly making a bid to buy the London Evening Standard.

All apart from the Daily Mail (funny that...).

Granted, it's a nice tale, with some juicy angles to it. Lebedev is an ex-KGB man and pal of Mikhail Gorbachev who made a fortune out of the banking industry. His 28-year-old son Evgeny is a fixture on the London social scene, with a penchant for celebrity girlfriends, who hooked up with Jefferson Hack's Dazed group to produce a Russian edition of Dazed & Confused.

It's a rumour that has been floating around since before Christmas. But I have to say it can't have been a very firm bid because, if it was, surely the Daily Mail & General Trust - which is a publicly quoted company - would have been duty bound to report the bid to the stock market. Can DMGT chairman Lord Rothermere really make a unilateral decision to turn down a bid for a slice of a publicly quoted company?

There's no doubt DMGT is looking hard at every option for the Standard and its sister London Lite free paper, which are both haemorrhaging money. Former Mail on Sunday advertising director Simon Davies became ad director of the Evening Standard and London Lite in October. Associated Newspapers this morning confirmed further details of Media Week's story from late last year about the restructure of its Evening Standard, London Lite and Metro sales operations.

As I picked up my umbrella from my local Standard vendor in Hammersmith the other day, I did jokingly ask him if I got a free newspaper with it as well. I can add the umbrella to my rucksack, books, mouthwash, Mars Planets and other freebies the Standard has given away over the past year to try and encourage Londoners to buy an evening paper rather than picking up the free London Lite or thelondonpaper.

Of course, if there is truth in the story and the Russian bid for the Evening Standard is indeed serious, no doubt we can expect an announcement to the stock exchange very shortly.

By now you will no doubt all be heartily sick of reading the multifarious doom-and-gloom predictions about what's in store for us in 2009 that filled newspapers, magazines and other media over the holiday period.

In the spirit of looking on the bright side of life, it's worth remembering that each and every consumer that media owners and advertisers look to target has a uniquely intimate and personal relationship with a vast range of different media - and these interactions still provide our industry with many reasons to be cheerful in and amongst the harsh wider economic realities that face us.

Here's a taste of the media diet of one totally unrepresentative consumer (me) that I hope illustrates my point.

Sky Sports - can't live without it.

At The Races - especially presenters Matt Chapman and Sean Boyce.

Bravo - especially Danny Dyer's Deadliest Men (I know, I know, bear with me on this one).

Paramount Comedy - especially Two and a Half Men and King of Queens.

Old episodes of The Sweeney and Minder on ITV 4, and Alan Partridge on Dave. I am even looking forward to the new Minder on Five, starring Shane Ritchie, though it has a lot to live up to.

Old films on Five. Some new(ish) films on Sky Movies.

I have a love/hate relationship with LBC, but enjoy the opportunity of listening to the likes of Nick Ferrari, James Whale and Ken Livingstone on the same network.

Online, to be honest I only access 10 or a dozen sites on a regular basis. I still use Facebook. And so do many others as far as I can see. The rest is one-off use for a particular reason.

I dip into most newspapers every day, but that's part of my job. I still believe in them strongly.

Magazine-wise I read lots of things, including Private Eye, Wired, The Week, Word, Uncut and, as Stevie Spring at Future is keen on pointing out, niche magazines specific to my dull hobbies such as chess, boxing, horseracing and so on.

Since I started my job at Media Week I am also one of those sad people that avidly notice all the different types of outdoor advertising, not for the ads themselves, rather to see which operator owns the site...

This is a fairly meaningless, and certainly not exhaustive, list in terms of drawing general conclusions, and, please, I'm not interested in a psychologist's view on my slightly odd media consumption habits, but I don't believe it's untypical and it does go to show how much all of us interact with many different media in the daily course of our lives.

This interaction is certainly becoming more fragmented, although the big Saturday night mass audiences are still being delivered to great effect by ITV, but it is not declining overall. And that's got to be good news for media owners, media agencies and advertisers of all types. A reason to be cheerful?