Media Week

I was on a panel debating the future of media on Press TV's Forum show last week, filmed before an audience of 70 young people from London.

It was becoming increasingly incongruous for News International to talk about charging for all of its online content across all of its newspapers when one of those titles was thelondonpaper.

After all, the company could hardly start asking web users to pay for online access to a free newspaper's website.

While this was one of the straws that broke the camel's back, it was unlikely to have been the sole reason for NI to finally concede defeat and pull the plug on the loss-making free paper. In today's economic climate, harsh lights are being shone on everyone's business - and a pure ad-funded model just wasn't sustainable.

The closure initially begs more questions than it answers. What will London Lite do? It was set up as a spoiler to scupper thelondonpaper's development. So, presumably, its work is now done and it will close and Associated Newspapers can go back to concentrating on its profitable Metro free daily morning paper?

And what will the impact be on the London Evening Standard? Presumably it will be an opportunity for an already more youthful and semi-revitalised paper to sell more copies to the younger audience that embraced thelondonpaper's approach? Will the Standard continue to give away free copies after 7.30pm in the centre of London, which has worked well in recent months?

Then there's tfl's free newspaper distribution contract, which is currently out to tender. Metro is the incumbent, but it is likely to have far fewer competitors now.

Finally, could this be good news for good old fashioned daily newspapers, and will the tide turn back towards paying for them?

We've heard a lot about Generation Free in recent times, as thelondonpaper dubbed its new breed of consumers used to getting free content from a variety of sources - especially online. That generation hasn't gone away or changed its habits just because thelondonpaper has called time on its free experiment.

But perhaps it's time for the media industry to act as one and try and stimulate a "Generation Pay" that recognises the value in professionally produced, quality content and is prepared to shell out their hard-earned for it. Or am I just living in cloud-cuckoo-land...?

There has been a lot of debate recently about the word "digital" and whether it still has any stand-alone relevance or validity.

In May, Decipher's Nigel Walley told Media Week's Media 360 conference the word had become redundant in a media context. He believes it has become a catch-all term for too many things or is used just to mean the web and a bit of mobile, ignoring big-ticket environments such as TV, radio and outdoor.

It's certainly true that everyone is bored with the oft-chanted mantra that this agency or that media owner is "putting digital at the heart of their business".

But if digital is redundant, where does that leave "digital" agencies? In this issue, Media Week profiles Andrew Walmsley, co-founder of UK's best-known and most well-established independent digital media agency - I-Level - as it celebrates its 10th birthday.

Over the decade, I-Level has fiercely guarded its independence, despite conversations and approaches from established agency networks. Walmsley's view has been that I-Level would be used as a sticking plaster for a network catching up on "digital", and would lose its very essence by merging with a full-service organisation.

I-Level has done some excellent and award-winning work for the Government, but the COI's decision to consolidate its media into one agency has sharpened the focus of Walmsley's planning for the next decade. The COI accounts for £39m of I-Level's £100m turnover and it can only re-pitch for the business in an alliance with another agency providing "traditional" media services.

Is this the right time for I-Level to bite the bullet and do a deal with one of the agency networks pitching for the COI business? Or is it an opportunity to create something genuinely new - similar to what I-Level did on launch 10 years ago - with an agency model for a permission-based advertising age where the consumer is king?

The strategy Walmsley and new chief executive Stephen Rust adopt will say a lot about the future of "digital" within the marketing services mix.

How do you solve a problem like ITV? That perennial question was back in the spotlight last week as Britain's premier commercial broadcaster released its half-year results for the six months to the end of June.

ITV also announced it had ended its extremely ill-fated flirtation with social media, selling off Friends Reunited for a whacking £150m loss to Beano owner DC Thomson.

Contrary to misinformed reports in some places, a new ITV chief executive was not named. The jury is still out on who is going to put the long-term strategy in place to revive fortunes. Actually, that is a little unfair, because there were some reasons to be cheerful in the small print underneath ITV's headline pre-tax £105m loss.

Ad revenue was only down 15% year on year against a market average of 17%. ITV expects its ad revenue to be down 12% in Q3, and just 7% in September, again outperforming the market. Not yet reason to hurl the top hat into the air, but encouraging nonetheless.

Sponsorship revenue increased 11% to £30m, a total likely to hit £50m across the full year. Digital revenue from ITV.com doubled to £10m. Again, small beer in the scheme of things, but at least they are improvements.

Significant costs have been taken out of the business and these savings are starting to feed through to the bottom line. The pension issue is not great - an understatement - but it is being addressed.

Aside from the financial results, ITV still expects an easing of the contract rights renewal mechanism to be announced before the next trading season.

In addition, ITV is looking forward to a relaxation of the rules banning product placement under a Tory government, which it believes could bring in an extra £50m of new money a year.

So the ship has been stabilised and there are clearer waters ahead. But if it is to sail forward confidently into a convergent multichannel digital future, the new chief executive will have to implement a new vision swiftly and decisively.

Managing decline and outperforming a plummeting market by a couple of percentage points is not a recipe for long-term sustainability.

My recent piece about local councils and their increasing investment in free newspapers certainly ruffled a few feathers amongst the people who work on said papers.

I was contacted by editors of council papers in Hammersmith and Hackney taking me to task about the underlying thrust of the article: i.e. that council papers are, by definition, a threat to local democracy because they will not criticise the hands that feed them, and that they are taking advertising revenue from commercially run local newspapers.

These points were not lost on Lord Carter and his Digital Britain report, which in June referred the matter to the Audit Commission for investigation, saying: "While local authority information sheets can serve a useful purpose for local residents and businesses, they will inevitably not be as rigorous in holding local institutions to account as independent local media."

For their part, the editors pointed out that more than one council-run London paper has an ABC audit, with the weekly East End Life (80,958) and fortnightly Lambeth Life (115,830) joining H&F News (75,500). Two more are set to follow in the next set of ABCs. So, apologies, there is more than one council newspaper in London with an ABC.

However, since the idea of having an ABC figure is to better be able to sell advertising, the fact there are multiple papers signed up only serves to underline one of my points further: that council papers are aggressively competing for advertising with their commercial rivals.

The editors' argument is that they themselves are former commercial local newspaper employees and that the companies that operate them had failed to invest over a number of years, thus making the papers untenable. They say the council papers are at least giving jobs to journalists and that they are filling a gap neglected by the commercial sector.

They may have a point about investment in local media, and the ills of commercially run papers cannot be solely laid at the door of council newspapers. But, however strongly the editors protest, nothing changes the basic fact that council papers are, by definition, not going to act as a check on local democracy because they will not criticise the organisations that they depend on for existence. And that is unarguable.