Media Week

So, just as media regulator Ofcom delivers a damning verdict on Sky's hegemony in the premium pay-TV market, another plucky competitor slinks off into the distance with its tail between its legs.

Setanta, like On/ITV Digital before it, was ground into the dust by the competitive imperatives of UK sports broadcasting and the brutal economic environment it launched into. Unlike Rupert Murdoch in the 1990s, Setanta's backers couldn't - or wouldn't - stump up the cash to see it through the tough times to profitability.

Disney-backed ESPN has won the vacant football rights and will launch a new sports channel soon. And Sky's new opponent is a thoroughly different kettle of fish to Setanta. While little-known in the UK, ESPN is a serious broadcasting behemoth with a strong presence in most global markets. Its backers' resources dwarf even BSkyB's main shareholder News Corp's empire.

Initially, at least, the relationship between the two companies is more conciliatory than that between Setanta and Sky. ESPN has taken a pragmatic approach and will wholesale its channels and sell its advertising through Sky. It will be easier for consumers to upgrade to ESPN through their existing supplier than having to start afresh, which hindered Setanta, as did the latter's patchy reception, variable customer service and willingness to let subscribers sign up for monthly contracts rather than insisting on 12 months.

Sky will regard ESPN as a new friend as well as a foe, but figures it can benefit from extra revenues and will feel it is doing its bit to placate the regulator.

We will never know whether Setanta would have succeeded if it hadn't lost half its Premier League rights from 2010 and hadn't launched into such a harsh recession, but it certainly had the goodwill of the media buying community, which was happy to see Sky get some competition.

When the next Premier League football rights negotiations come around for the seasons from 2013-14 onwards, ESPN will have established its foothold in the British premium sports pay-TV market.

No one takes any pleasure in seeing the people at Setanta lose their jobs, but, in the long term, ESPN's well-funded entrance into the UK media market can only be beneficial, even though it is a shame a home-grown company couldn't have been the one to give Sky a proper run for its money.

Have media agencies embarked on a destructive one-way journey to oblivion? Omnicom Media Group's EMEA chief executive Colin Gottlieb lays it on the line in this week's feature when he says the days of the traditional media buying commission system are numbered and remuneration models need to evolve rapidly if agencies are to survive.

For the simple fact is media agencies are engaged in a cut-throat "race to the bottom" - driven in many cases by their clients - whereby they are offering their services for such small margins that their whole business model is becoming untenable.

Take the recently concluded £300m Nokia global media planning and buying pitch. Incumbent MediaCom had the squeeze put on it by the Finnish mobile phone giant for months prior to the review, culminating in the WPP agency offering its "absolute best price" deal.

It is suggested those terms involved the agency working at cost, or even below cost. But the client still wanted to go ahead with its fishing exercise to see what else was on offer in the market. So MediaCom made the unusual decision not to pitch for the business - a brave one in the current economic climate.

If a multibillion-pound network such as MediaCom can't make money out of an account, you have to wonder who can - and what sort of service the client will receive. But, of course, there were several eager agencies happy to go for the business, which was eventually won by Carat.

I don't want to get into a WPP versus Aegis spat, and I'm sure Carat would say it has won the business fair and square and fully intends to make money out of it. But it is an example of what's going on in the market, illustrated by numerous similar pitches over the past 12 months involving all the major agency networks.

The danger, as also illustrated by our feature, is that the cut-throat nature of this race to the bottom forces agencies to rely on some of the less transparent ways of making money on accounts - and that is surely the reverse of what needs to happen if agency business models are to successfully evolve into more sustainable areas such as content and consultancy.

Now the dust has started to settle on Digital Britain it seems timely to try and take some sort of perspective on the process and its likely outputs.

As the introduction to the final chapter of the hefty report rather pretentiously notes: "A goal without a plan is just a wish" (Antoine de Saint-Exupery), and that statement is even more pertinent when you reflect that the architect and sponsor of the report - Lord Carter - is already preparing to head off to pastures new at the end of July.

With a new media minister who hasn't been involved in the report freshly in post too, it is difficult to see who is going to drive through the many consultations and proposals in Digital Britain. Indeed, listening to Ben Bradshaw at the All-Party Parliamentary Group on Media summer reception at Channel 4 the other night, some observers detected a distinct sense of the report being "kicked into the long grass". Speaking the day after the report's release - admittedly in one of his first outings under his new portfolio - Bradshaw only dwelt on Digital Britain for two or three minutes. And his observation that the commentariat would hopefully look back on the initiative far more favourably than it had been received initially definitely had undertones of "not invented here".

When I spoke to Stephen Carter on Wednesday he was adamant that Chapter 9 of the report laid out a clear plan for the delivery of the proposals in the report and he said that, while there are several follow-up consultations, there is a clear difference between open consultation and procedural consultation, which most of those in Digital Britain are. He characterised these as "implementation consultations" required by law when putting new legislation together, rather than more convoluted and time-consuming talking shops.

I also detected a frustration from Carter that many people were casting judgment on the report and determining its legacy without actually having read it. But I'm afraid that's what happens when you release a substantial document and several weighty additional tomes at 3.30pm in the afternoon, giving journalists a relatively short time to digest the contents before their copy deadlines.

It would be a shame if the process does turn out to have been largely fruitless. The procedural and logistical vagaries of producing and implementing public policy through the machinations of government should not be underestimated.

There are some positive elements to Digital Britain - one can only hope that the will still exists in the relevant government departments to see these developments through to completion once Carter has departed.

For his part, he refused to be drawn on speculation that he is interested in the vacant ITV chief executive's job - or even whether such an application is possible given the rules of the Commissioner for Public Appointments on departing ministers and them moving into commercial employment.

Carter's only comment was that he is "off to France" when he leaves office, though there is little doubt that if he is saying "au revoir" to Digital Britain he will soon be saying "bonjour" to a lucrative new job in the private sector.

I will come back to the subject once I have had a chance to digest the full contents of the report in more depth, but here are a few first impressions of Lord Carter's Digital Britain report.

It was interesting to see that Carter has called for an inquiry into local authority newspapers and their impact on the commercial regional newspaper sector. As discussed previously, this is an issue that needs to be addressed and the inquiry is welcome.

However, it was surprising to see that Carter has decided not to overhaul the rules on mergers and acquisitions in the regional newspaper sector. He is placing his faith on existing regulations, bar a few "modest" changes and more "pre-notification" discussions with the Office of Fair Trading.

This will not please regional newspaper publishers who had been led to expect new, more relaxed legislation, after concerted lobbying by the Local Media Association - headed by former Johnston Press non-executive chairman Roger Parry.

As expected, the Channel 4/BBC Worldwide situation will rumble on and I would be surprised if a deal was done this year. Rather, Carter has welcomed the joint venture discussions between the two parties in areas such as digital channels, advertising and DVD sales and will ease the governance and regulatory elements required to make such ventures happen.

Radio seems to have done rather well. Carter has committed to a digital switchover date of 2015, which is ambitious but is what the radio sector has been asking for.

It was telling at Media Week's recent Media 360 summit that the Government's Digital Britain process wasn't exactly top of the agenda in the debates that took place.

Indeed, Global Radio chief executive Stephen Miron was the only person to even mention communications minister Stephen Carter's high-profile report and attendant initiatives over the two days of the conference.

That's because the media industry's eyes tend to glaze over when it comes to the convoluted and time-consuming processes required to produce government policy.

However, this stuff is important, especially for TV, radio and local newspapers. And, in fact, Lord Carter has overseen a relatively short and painless process as he navigated the timetable from green paper - policy options - to today's white paper - policy recommendations and necessary legislation.

Carter's interim review in February was "white-ish" in hue, as some of the options were already pretty much inked in.

The local newspaper sector will get new rules on mergers, which will allow the industry to rationalise and horse trade to produce leaner, meaner and more geographically logical stables of titles.

Carter will reaffirm his wish for Channel 4 and BBC Worldwide to merge or work together more closely as a second public service broadcaster. However, he cannot dictate what happens to a company that is essentially in the private sector, so, to a certain extent, this one lies in the hands of the directors of Channel 4.

Ireland insists it is on track to meet its target of universal broadband by 2010: Carter's report should put a proper timetable in place for achieving the same in the UK.

And Miron's interest will be rewarded if, as expected, his Classic FM franchise and the other two commercial licensees are guaranteed protection in return for investing in digital radio.

If today's report contains the firm proposals some media executives accused the interim document of lacking, Carter will head back to a lucrative role in the private sector knowing he achieved as much as he could within the challenging constraints of the public policy system.

l The deadline for Media Week's 30 under 30 competition is next Monday (22 June). Contact harriet.dennys@haymarket.com to get an entry form or submit entries.

Media Week's various planning awards took centre stage last week as the ceremonies were held for the Thinkbox TV Planning Awards and the IPC Magazine Planning Awards.

The celebrations, at Sketch and Tate Modern respectively, brought together some of the brightest minds in media planning and provided rare recognition and reward for those who get their hands dirty by making sure every penny of client spend is employed strategically, creatively and - most importantly - effectively.

Congratulations go particularly to Arena BLM, which won the Grand Prix in the magazine awards for its work on the launch of Westfield in west London, especially its part in Grazia magazine decamping to the shopping centre to produce one of its issues. Top marks also to Mediaedge:cia, which won the top gong in the TV awards for its ongoing work for Morrisons in the highly competitive supermarket sector. MEC also won three magazine planning awards.

The TV and magazine awards followed the culmination of the third year of Media Week's extremely successful partner-ship with Clear Channel for the Outdoor Planning Awards and pre-empt the Radio Planning Awards, which used to be run in conjunction with GCap Media - prior to its acquisition by Global - and have now been folded into a wider set of awards for the radio industry under the auspices of the Radio Advertising Bureau, which take place later this year (see Radioadvertisingawards.co.uk for details).

While splitting awards into single-discipline subject areas might seem anachronistic in this day and age, the concept actually works exceptionally well. All the awards have categories recognising integrated campaigns or digital activity and they give each medium a rare chance to shout from the rooftops about their achievements. All also involve high-profile sponsors who are happy to celebrate excellence across their sector, whether it involves their company or not, so special thanks go to Clear Channel, IPC, Thinkbox and the RAB for their leadership approach.

l The entry deadline for the Media Week Awards has been extended until 19 June - although please be aware there is a late-entry fee of £25 for each entry submitted after the original due date of 12 June (www.mediaweekawards.co.uk). to enter.

I noticed a funny thing on my regular late-night trip home on the Tube last night. The usual throng of ABC1 theatregoers were heading back to Chiswick, Kew, Richmond and similar upmarket parts of London (I got off before them at Hammersmith in case you were wondering), joined by after-work drinkers and the young crowd who had been into town for the night.

But as well as reading their West End show programmes, thelondonpaper and London Lites, more than a fair sprinkling of them were reading the revamped London Evening Standard.

Previously it would have been exceptionally rare to see someone reading the Standard on the Tube that late at night, but presumably this is a function of the new policy of giving away copies in theatre-land after the free paper distributors have gone home.

It was also interesting to observer the way people - generally older passengers - were reading the Standard. Rather than snacking on the paper in the way readers do with the freesheets, people were spending time on each page, reading the articles and, presumably, taking in the advertising. And rather than discarding the paper half way through their journey, having already flicked through it, most people took the Standard home with them.

I readily accept that this is an unscientific observation by one person of the type I hate, but I'm sure I have identified a change in behaviour on one small stretch of the Tube network. It will be interesting to see if this is replicated across town.

If the Standard can re-engage with an upmarket, affluent audience that has lost touch with the paper by giving away a few copies in central London late at night it might just make its much-derided policy pay dividends and garner more advertising.

Local papers are facing troubled times, not least from the plethora of council-operated freesheets that effectively compete with them for advertising.

My local paper is the Trinity Mirror-owned Hammersmith & Fulham Gazette, a weekly paper that costs 60p, operates out of Hounslow and covers the Ealing and Hammersmith & Fulham Council areas of West London with localised editions. H&F News is operated by Hammersmith & Fulham Council and delivered free to an ABC-audited 75,500 people every fortnight, dubbed "The local paper for Hammersmith residents".

The latest edition of the council paper has six pages of display ads, a property supplement and cover wrap, plus three pages of public notices and planning applications relating to Hammersmith & Fulham Council. It is the only ABC-audited council-run paper in London.

The Trinity Mirror paper, part of the Ealing & Acton Gazette series, has an ABC of 10,784, just over 2,000 of which are in Hammersmith and Fulham. It has eight pages of display ads, three classified, three jobs, an Ealing edition property supplement and 1.5 pages of public notices - all from Ealing Council, none from Hammersmith & Fulham. Unlike the council product, it has a note about journalists conforming to the Press Complaints Commission code on its flannel panel.

The splash in the Trinity Mirror paper outlines concerns about a dangerous road in Shepherd's Bush where two children have been knocked down recently, prompting a petition to Hammersmith & Fulham Council. There is no mention of this in the council paper, which has a puff piece about the council extending after-school care across the borough on its front page, one of many plugs for council initiatives throughout the paper.

Council-run competitors are a factor forcing local papers to cut resources to make their products viable commercially, which has a knock-on effect on quality and coverage. The council product feels more "local" because its resources are concentrated on Hammersmith and Fulham, not spread thinly across two large boroughs. But I doubt you'll ever see a story in it criticising the way the area is run. If it eventually puts the Gazette out of business, it will be a sad day for local democracy - and a sad day for the future of local newspapers.