Steve Barrett

November 2009 - Posts

It has been noted in these pages several times that everyone is talking to everyone in this distressed economic climate. No deal or partnership, no matter how unlikely, is off the agenda - especially in TV ad sales.

 

But amid talk of Channel 4 hooking up with Sky or Five, IDS being subsumed in Sky or Viacom as a result of a sale of Virgin Media TV, or BBC Worldwide linking up with any of these parties, one deal not mentioned - at least in public - was the one that just happened.

 

Sky Media has built on its retention of Discovery's ad sales by stealing the £75m-a-year sales contract for MTV Networks International, which BSkyB owns jointly with Viacom Inc, from the Nick Bampton-led Viacom Brand Solutions. Sky Media will sell across MTV, Viva, Nickelodeon, Comedy Central, BET (and E! Entertainment) from 1 January.

 

The new arrangements apparently guarantee MTV its ad revenue for the next five years, although at 2009 rates, and could save it £4-5m in costs in each of these years.

 

It is likely to already be involved in 2010 TV trading negotiations for the channels. And it almost certainly means the end for incumbent VBS, putting the future of Bampton and other senior managers among 75 staff at the sales house in considerable doubt.

 

It is small reward for Bampton and his team, above whose heads the deal was done between Sky Media's Nick Milligan, BSkyB chief executive Jeremy Darroch, MTV Networks UK & Ireland managing director David Lynn and head of international Bob Bakish. But they have fallen victim to a vicious business environment where doing a great job, being innovative and being creative aren't necessarily enough to retain contracts - as many media agencies will testify.

 

It's a sign of the times. It's a sign that everyone is in the middle of 2010 planning. And I have a feeling it certainly won't be the only eye-catching development in media-land before the difficult year that has been 2009 draws to a close.

There must have been some groans at Wapping in May when Rupert Murdoch pronounced that his newspapers would be charging for online content within a year.

 

Whether that was the News Corporation chairman's plan or not, Alex Ferguson at Manchester United and Tony Blair at Number 10 have shown that revealing self-imposed deadlines in public can make you a hostage to fortune and is invariably counterproductive.

 

Hence, it was no surprise when Murdoch admitted last week he "can't promise" the deadline will be met, although he wasn't forthcoming about the reasons why. My understanding is that News International is trying to set up an online pay platform to bring together content from third-party providers in addition to material from The Sun, News of the World, The Times and The Sunday Times.

 

The service will mirror online what Sky, in which News Corp is the biggest shareholder, does on its TV electronic programme guide. The EPG provides access to Sky TV, as well as channels from other TV firms. TV media owners pay Sky for a listing on it, encryption and regionalisation. Sky pays the media owner a fee for every subscriber signed up and a share of revenue if it sells the advertising.

 

Users would buy News International content and add on other packages as desired. So you might buy The Times and The Sunday Times, as well as The Daily Telegraph, which News International has been in discussions with. The system works because it avoids multiple pay platforms, which dilute the user-friendliness of the purchasing process and don't exploit economies of scale.

 

The downside for third-party media owners is that News International owns the customer relationship and will presumably be able to market further services to the user base, which is no doubt complicating negotiations and technical integration.

 

Other media consortia are looking at similar group charging initiatives, so no wonder it is taking more than a few months to put together. My sense is that News International and its competitors' online charging efforts will be one of the biggest rolling media stories of 2010 - but the offers won't be trivial to put in place.

The Media Week Awards night, which took place at a glitzy ceremony at the Grosvenor House Hotel in Mayfair last Thursday, sometimes begs as many questions as answers.

 

Will the comedian make himself heard above the raucous crowd? Answer: Frankie Boyle kept the room under control for 15 minutes - no mean feat as several entertainers from previous ceremonies and your humble correspondent can testify.

 

Where are TalkSport's awards trophies? Answer: a search party has been dispatched after the radio firm celebrated so hard it "misplaced" its Media Brand of the Year, Sales Pitch Niche silver and Sales Pitch Large bronze trophies somewhere in central London.

 

And what were Manchester City footballers Shaun Wright-Phillips and Wayne Bridge doing at the OK!-sponsored awards after-party less than 72 hours before a match? Answer: who knows, but they were less than impressive in City's 0-0 draw with Birmingham on Sunday.

 

Some questions answered themselves. Few disagreed with the judges' view it was Mediaedge:cia's turn to be crowned Media Agency of the Year. Chief executive Tom George and his team have transformed WPP's former weakling into a media powerhouse, winning the prestigious Orange account among £130m of new business in the awards period. MEC has kicked off this year in similar style, winning Lloyds and retaining Danone, and will mount a robust defence of its title.

 

Sales Team of the Year was much closer and it is a tribute to Nick Bampton and Viacom Brand Solutions that it won top sales gong for the second year. Judges were impressed with VBS's entrepreneurial and proactive approach to setbacks, such as the ban on HFSS advertising, which particularly hit Nickelodeon and MTV. This was reflected in its work for Ella's Kitchen, which won Sales Pitch Medium.

 

TalkSport has turned itself around since some dark days a few years ago and thoroughly deserved its Media Brand of the Year success. WPP's MediaCom also had another good year, winning Grand Prix and Media Idea Large for Mars Galaxy, Media Idea Niche for NatWest "Teens Adapt" and International Campaign for Herbal Essences.

 

It was a great year, with the winners rising above the recessionary gloom to set the bar extremely high for next October's renewal, which we are already looking forward to.

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