Media Week

I’ve got bad news for anyone waiting for the much anticipated “price war” to erupt over the iPhone in the UK: it’s not going to happen.

There’s been much excitement about the iPhone being made available at lower prices ever since Apple announced it would not be extending its exclusive two-year iPhone deal with O2. But I’ve learnt it’s not going to happen any time soon due to one very specific reason.

The touch-screen operated iPhone is undisputedly the daddy of all mobile handsets right now. If you know someone who owns one, chances are you know someone who loves one.

Many admirers not on O2 have been waiting for the rollout of the iPhone across other networks, and the increase in competition is widely expected to act as a catalyst that will bring down the monthly cost of the iPhone.

There was notable disappointment when Orange, the UK’s third-largest mobile phone operator, unveiled its tariffs for its iPhone deal on Monday, and guess what, they are broadly in-line with those already being offered by O2 – around £30 a month for contracts, and an 18 month commitment.

Yes, there are slight variations over what is included in the monthly tariff, but the basic packages and, more importantly, the monthly cost to the consumer are very similar.

There’s a reason for this.

Those now pinning their hopes on Vodafone undercutting both O2 and Orange when it launches its iPhone package in the New Year will be equally disappointed.

A high-level Vodafone exec has told me the basic price ranges of the iPhone are being set by Apple at the negotiating table.

While some degree of variation is being allowed for, the general monthly costs, at least for the first round of contracts, have been stipulated by brand-protective Apple.

If you want an iPhone in 2010, it’s still going to cost you.

Last night’s Media Week Awards at the Grosvenor proved yet again that no one parties like the media fraternity.

While other ‘big’ awards have been, well, rather less big this year, Media Week’s annual bash was as large and as vibrant as ever, with more than 1,300 attendees representing media owners, agencies and clients.

Of course the main topic for the night was predetermined long ago: Just how bad is the current economic climate?, how much worse will it get?, and when will real growth start to appear?

As one newspaper managing director told me, “everyone’s still talking a good game, and I think that’s important, but behind closed doors we all know any talk of recovery is grossly premature”.

This sentiment supports downgraded ad forecasts by ZenithOptimedia earlier this month, which marked the UK out as one of the world’s biggest fallers this year, after a "worse than expected first half of 2009".

But not even the current climate could deflate the worthy winners last night, with Mediaedge:cia paving the way after winning the industry’s biggest accolade, Media Week’s Agency of The Year.

The WPP agency continues to go from strength-to-strength, growing billings 5% year-on-year at a time when the wider market is battling double-digit declines.

While fierce rivalries within the British media mean very few awards ever go undisputed: the crowning of MEC last night was one of those rare exceptions.

“I suppose if we were going to lose to anyone, it should have been them,” said one runner-up agency head begrudgingly.

“Can’t really argue with that," opined another, "but lets see how where they go from here,” which for those who don’t know, is high praise indeed in agency-land.

Comedian Frankie Boyle aptly set the tone for the evening from the off, being suitably funny and offensive, with an added edge of instability.

Of course, not even the best celebrations run entirely smoothly, and when OK!’s after party was gate-crashed by footballer Shaun Wright-Philips and his “crew”, it was definitely time to go home.

Now where's the Pro Plus?

Channel 4’s departing chief executive Andy Duncan has no plans to go quietly at the end of this year, as proved by last week’s announcement of a ground-breaking content tie-up between the broadcaster and YouTube.

By the time Duncan is carrying the last of his belongings from the shiny building in Victoria, internet users should be able to view a selection of ad-funded C4 content, including Skins and Hollyoaks, via Google’s video site for free.

The move could be a significant development towards generating digital revenues for both C4 and YouTube.

The non-exclusive, three year deal allows C4 to keep control of its own advertising sales, and some non-C4 content to boot, while reportedly giving the broadcaster the larger share of revenue.

Martin McNulty from internet marketing agency TrafficBroker agrees the partnership has the potential to be very interesting for C4, noting it "opens the broadcaster up to a much bigger advertising market, that is liquid". He suggests that if traditional content providers can tap into the auction-type ad sales model that has already made adwords a success for Google, it could be a major break through.

Just as significantly, the deal is also the first real sign that exiting Duncan has a list of ‘unfinished business’ concerning commercial partnership which he has every intention of completing.

Last month, he told me he hoped to be able to announce "two or three commercial partnerships" before he steps down as CEO, and refused to rule out a tie-up with BBC Worldwide.

The deal, already dismissed by most as being dead in the water, gained renewed credibility yesterday when Culture Secretary Ben Bradshaw called talks between Channel 4 and BBC Worldwide "encouraging."

Whether the BBC is now more minded to play ball or not remains to be seen, but Duncan clearly has a point to prove and his legacy in mind, which could make for an interesting final quarter. Watch this space.

Martin Sorrell, chief executive of WPP and one of adland's best known soothsayers, has dramatically revised his stance on the viability of publishers charging for content online following comments from the quintessential newspaper man, Rupert Murdoch.

Speaking at an industry event in Greece last week, The Daily Telegraph reports an irrepressible Sorrell, as saying: "[Rupert] Murdoch is absolutely correct to try and get people paying for content - it is critical for traditional media businesses as there is not enough advertising to support these models anymore.

"Getting consumers to pay for content they value is key. We have to find those areas."

Such sentiments will be music to the ears of those operating in the embattled newspaper sector, which according to Sorrell's own media investment arm GroupM is expected to see advertising revenue plummet 26% in the UK this year.

But such apparent support for online pay-walls flies in the face of Sorrell's own vision of the future, announced less than 10 months earlier.

Addressing an international advertising event in January, there could be no mistaking what the WPP leader thought about the position traditional publishers now find themselves in, or his reservations about charging for web content.

"Some of the structural changes we're seeing taking place in the [newspaper] industry, particularly in America, the failure and bankruptcy and reorganisation of these [publishing] companies is going to continue. And there's no way of stopping it, because we've given it away for free," he said.

"The seeds of this problem were sown when the people who created the new media industry, probably in the early nineties, decided - rightly from the consumers point of view I have to say - to give it away for nothing.

"It's impossible actually now to take it up. You can start up here [high] and take your pricing down, but you can't start there [free] and start moving it up."

It appears News Corp's venerable leader's commitment to "charge for all our news websites", buoyed by thriving online subs at the Wall Street Journal, has led Sorrell to change his mind.

It marks the latest backtrack in what has been a tricky year for WPP's famous crystal ball-gazer, who, lest we forget, is responsible for group billings of more than $80 billion, or around a third of all the world's measured media buying.  

At the same event in January, Sorrell predicted "a flat year" for the global ad market in 2009, adding reassuringly: "We're not looking at the Armageddon or the Apocalypse Now that analysts and media followers are forecasting.

"We don't see it as bad as Goldman and others who talk about -5, I see -10 from [some quarters] which seems somewhat strange."

Nine long months, a series of forecast revisions, and thousands of redundancies later, and Sorrell now accepts a drop of 5.5% is the most likely outcome.

But then it's been one of those years; also at the IAA event in January, media execs were expressing incredulity at the suggestion a former Russian spy was being bandied around as a potential buyer for London's Evening Standard.

And so it comes to pass, News International's most popular daily newspaper The Sun has declared its allegiance to David Cameron's Tories.

The Sun tells its readers in no uncertain terms today to vote Conservative at the next election, effectively ending 12 years and 7 months of "support", for the Labour Party.

"Labour's Lost It" screams the front page, followed by a detailed blow-by-blow account about how Labour's tenure has been punctuated by "under-achievement, rank failure and a vast expansion of wasteful government interference in everyone's lives".

Of course the announcement was perfectly orchestrated, coming as it does just in time to pop any feel-good bubble generated by Gordon Brown's rabble rousing speech at the Labour Party conference in Brighton last night. But don't worry Gordie, you'll always be a hero to your wife at least.       

Regardless, despite all its bluster, in today's multimedia 2.0 age, the Current Bun switching sides is not the game-changer it once was. A barometer of public opinion, perhaps - but nothing more.

In the past, Sun editors have been wined and dined by politicians on both sides of the fence and famously claims to have won the election for the Conversatives in 1992. Yet this week we're told News Int's chief executive Rebekah Brooks couldn't event get 10 mins with the PM to end their relationship in person.

The only real surprise is that it has taken so long for Rupert Murdoch's red-top to turn blue.

As with all messy break-ups, the writing's been on the wall for some time. Now for the next six months we can sit back and enjoy the spectacle, as both sides try and convince us of their relevance.

In a move that will shock the city and the media industry alike, ITV has announced Tony Ball is no longer in the running to be its next chief executive, after a failing to reach agreement over terms and conditions.

The eleventh hour collapse throws ITV into chaos and follows rumours of Ball demanding a £30m five-year package - some £10m more than the broadcaster was believed to be offering. 

In an announcement to the city moments ago, the ITV Board confirmed it has "terminated its discussions with Tony Ball" after an exhaustive process of negotiation and discussion highlighted "a number of substantial differences, including a failure to finally agree contractual arrangements, together with a disagreement over the future chairmanship".

Today's news follows HMV chief, and one-time favourite for ITV's top job, Simon Fox ruling himself out of the running last month.

During the broadcaster's search for a new chief executive the role of former CEO and chairman Michael Grade has cast a long shadow over proceedings.

The failure to secure Ball as its new CEO, and with the absence of anyone else either internally or externally waiting in the wings, it now seems likely a new chairman will be in place at ITV in time to recruit its next chief executive.

‘The summer’s over, I’ve had time to think about it, I want to quit,’ appears to be the mantra being followed by many high-profile media execs this month.

Recession or not, September has lived up to its billing as the month which gets headhunters hearts racing. 

Today’s news that Andy Brent, group brand marketing director at BSkyB, has parted company with the pay-TV broadcaster just one year into the job, has taken many by surprise.

His departure, confirmed in an email by Jeremy Darroch, BSkyB's chief executive, leaves a gapping hole in the management of the media and broadcasting group’s £100m plus marketing operations.

You can bet on Brent resurfacing somewhere soon.

But as unexpected as his exit is, it's far from unusual this month. Also on the move is News International’s chief marketing officer Jeremy Schwartz, who walked out less than nine months into the top marketing role.

Let's remember it took News Int almost six months to find Schwartz for its first overarching CMO role for The Times, The Sunday Times, The Sun, and News of The World, so it seems safe to assume News Int's newly promoted chief executive Rebekah Brooks nee Wade was less than convinced.

The newspaper publisher is now expected to move back to its tried and tested model of having individual marketing directors responsible for each title.

Elsewhere, advertising veteran’s Daryl Fielding’s brief foray into newspapers ended abruptly on Monday, and Simon Davies is already primed to take over the role of commercial director of The Independent and The Independent on Sunday.

Despite best intentions, sometimes, things just don't work out - ask outgoing PPA chief executive Jonathan Shephard, who has attracted widespread criticism for his 18 month spell at the association for consumer and B2B magazines.

His decision to cull the association's events and marketing activities during what is arguably the most challenging time the magazine industry has ever faced, didn't go down too well with many publishing members.

And Shephard's own unique style of management and communication didn't appear to help his cause, with many vocally against him from the outset.

And we haven't even mentioned C4's Andy Duncan, News Int's Mike Anderson, Mindshare's Nick Waters or SMG's Jim Marshall.

All of which make for a heated return from the summer, and you get the sense it's just the beginning.

Shock news yesterday that the plug will be pulled on the mighty Teletex service at the end of year.

Who would have thought having a news service broadcast in the shape of a screen full of text, the occasional block graphic and even different coloured fonts would ever look tired?

And this is a service in which consumers are in control. Simply type in the page number you wish to look at, wait a couple of minutes for the numbers to come around again, and er voila – the next page of text. Incredible.

Apparently the tough decision to stop broadcasting this prehistoric service was only made after “a comprehensive review of the business by the senior management”.

Teletext owner DMGT attributed poor financial performances, in part, to “the government’s meagre allocation of broadcast capacity for the public Teletext service in the 1996 Broadcating Act”.

Interesting. I would have thought the birth of the internet might have played its part in killing-off the near-static 15 year old text pages?

When Teletext launched in 1993 there were no 24 hour news channels, websites or free TV listings. Its mix of news, sport and weather, accompanied by TV schedules, quizzes and games was widely celebrated.

At its peak it attracted more than 20 million adults per week and was a highly lucrative multimillion pound business. That’s 20 million.

But in a new digital world, cheap holiday deals could only take it so far - in fact this service is being siphoned off and will still be available on Freeview.

Its version of rolling news is painfully out of step. The biggest loss come December will be the passing of Bamboozle.

News that Reuters, the long-established bastion of British news gathering, looks set to disappear from the London Stock Exchange passed without much comment last week, instead cold pragmatism was the order of the day.

The board of the now Thomson Reuters enterprise unanimously agreed that “unifying the company's capital structure is in the best interests of all shareholders”.

Simply put, by consolidating the company’s four listings to just two, the aim is to improve the take home for shareholders.

The shareholders vote on 7 August looks set to be a mere formality, resulting in Thomson Reuters remaining on the Toronto Stock Exchange and New York Stock Exchange but no longer part of the LSE or the Nasdaq.

It will signal another step away from Reuter’s strong British roots, which it has held for more than 150 years. Earlier this year, the company announced its official headquarters were now in the New York.

The HQ of the news giant used to be synonymous with Fleet Street, and was the last major news provider to severe its central London ties when it moved in June 2005.

But time marches on. Reuters has been expertly led by American Tom Glocer for almost eight years now, and following its “merger” (actually a buyout) with Canadian giant Thomson last year, UK shareholders (not too long ago 50%) constituted just 5% of its new combined base.

For one of the world’s best known and most respected global operations, which has operated out of London since 1851, there appears to be no discernable value left in being British.

“First, I have to start with an apology, we’ve spotted a mistake in the report… has anyone else spotted it yet?”

As far as agenda-setting Government launches go, Lord Carter’s opening gambit to the press pack at the RSA as he unveiled Digital Britain this week was far from reassuring.

What followed can best be described as a cagey preamble on some of the report’s key findings, delivered by someone who already seemed painfully aware of its own shortcomings.

At one point a member of the press read out a quite ludicrous sentence, overly complicated and full of disclaimers, and used it to question claims the report was clear and transparent.

“Yes, that could have been written better, so full marks for spotting that,” came Carter’s concise, sarcastic reply.

At another point, when asked for the second time to clarify the report’s recommendations regarding top-slicing the BBC licence fee to help ITV’s regional news, a weary Carter said he would be counting the “number of column inches” the BBC gave to the rest of the report, in the interests of fair and balance coverage.

Mildly amusing, it raised a titter, but hardly fair. The changes Digital Britain describes in its Public Service Content chapter pave the way for the first major overhaul of BBC funding in its 87 year history, you could understand the interest.

For Carter to become so exasperated so quickly offered some indication as to the many hours the creation of the final White Paper had already stolen from his life.

Another pesky member of the press pack launched into an attack on the Government’s plans for a universal 2Mb connection speed by 2012, surely it’s not enough and already behind the curve?

You’ve misunderstood, replied a patient Carter. He went on to blame his own “failure to communicate” that the 2Mb had been set as a minimum level, to ensure the pockets of the country currently without any decent service would not be handicapped or overlooked in the future. And so it went on.

The inglorious launch was actually the perfect precursor to what was to follow in the press the next day. “Digital dithering” cried the Telegraph, “Digi or dodgy?” asked The Mirror, while others like the Daily Express simply warned “Now a Tax on Every Phone”.

Of course, there were positives to come out of the report, not least the Government’s backing of a DAB radio network by 2015. The decisive move could be just what the industry needs to kick-start its new path in the digital age – let’s not mention internet-based alternative models for now.

Elsewhere, Digital Britain went as far as it could – not even the current Labour Party can force BBC Worldwide and Channel 4 to reach a partnership agreement – but the wheels have been well and truly greased and the train is now rolling.

But still, in the short-term Carter’s toils have been largely thankless and cannot really be judged until much further down the line.

I was not surprised to also learn this week that far from rejoining the fray at ITV, as suggested, the Lord now plans to leave his public life for the sunshine of Australia.

Forget Madonna and Ritchie, Jen and Brad or even Macca and Mucca, today’s news that AOL is to finally split from Time Warner is the divorce of the decade.

Some nine years and three months after their very public, ostentatious wedding, the veteran film and publishing giant Time Warner is walking away from its younger partner, AOL, due to what can only be described as “mutual disappointment”.

The upcoming parting of ways will draw a line under the defining first wave of media convergence deals, and neither will escape unsullied.

The partnership was consummated in the pre-dotcom bust winter of 2000. The $164 billion deal was the largest in corporate history, and brought together one of the biggest traditional media stalwarts of the 20th century, (which would later become home to IPC Media) and the largest provider of dial-up internet.

It was credited for creating “unparalleled resources” and opening up millions of new subscribers. The internet has boomed, burst and reshaped itself since then, while the publishing business is experiencing cyclical and structural change, the likes of which have never been seen before.

To say the marriage had issues is something of an understatement, and a separation has been on the cards for several years.

Time Warner stopped wearing AOL’s ring (using its corporate name) just three years after the deal, and since 2005 the company has moved away from subscriptions to focus belatedly on an advertising-led model.

The company’s share price has mirrored this uncertainty, dropping more than 30%, and in the last year net income has fallen from $4.39bn profit to a loss of $13.40bn.

Today, Time Warner's new chief executive Jeff Bewkes called the separation "another critical step in the reshaping of Time Warner that we started at the beginning of last year". Already, consensus is building that it is likely to lead to the eventual sale of the access division.

Nigel Gwilliam, head of digital at the UK advertising body IPA, believes this can only be a “huge relief” for Time Warner and admits the future for a standalone AOL is “uncertain”.

He adds: “AOL has struggled to evolve and has lagged behind its competitors even when times were good. [AOL CEO] Tim Armstrong has a major challenge ahead of him.”

For all his company’s progressive attitude to online, the seasoned publisher-turned-poet Felix Dennis remains a resolute technophobe. In an interview earlier this month, he told me he’d never had an email address, and for the sake of staff morale perhaps this is just as well.

“Why would I have an email address?" he asked. "You just waste your time. I’m really not interested in finding out that the receptionist’s sister is having a baby shower. I don’t care. I don’t need to spend 10 seconds of my life finding out that’s what all that was about.”

Dennis claimed his unconventional approach is now gaining traction with many senior executives in American and German companies. “They are no longer making their email addresses available because it wastes too much time. I’ve always know this.”

He’s not too keen on making full use of his mobile phone (which he does own) either: “I have never received or sent a text, and nor ever will I. I’m not a 14 year old kid who wants to keep sending texts or put his name up on Facebook to prove that he’s alive.”

An amusing if not rather damning statement, particularly for someone who admits to spending up to three hours a day writing poetic verse.

It got me thinking though, if I had a net worth of around half billion pounds and the means to employ any number of personal assistants, would I trawl through an inbox or prefer a regular verbal update on the ones that matter instead?

Read interview here

The future of the free weekly men's magazine Sport hangs in the balance today following news that its French parent company, Sport Media & Strategie, has gone into administration.

We're told the last issue of the magazine, which employs 24 people, was distributed on 3 April and the company is now “rethinking its business model".

While it's just the latest in a growing list of British magazine closures, Sport's positioning as a high quality, free title, distributed by hand across London every Friday, made it particularly susceptible to the advertising downturn.

Unlike every other magazine that has closed in the past year, Sport's readership is stronger than ever and its content has been nothing short of award winning; being named Best Sports Coverage within magazines at the 2008 Sports Industry Awards and the Launch of the Year at the 2007 British Society of Magazine Editors Awards.

But, at little over two and a half years old, the magazine is far from mature and the pockets of its independent parent, led by managing director Greg Miall and editor in chief Simon Caney, are far from deep.

It remains the only magazine of its kind, operating without the national reach of Shortlist, and also without its broader remit.

However, in a short space of time, Sport has struck a cord with advertisers and its readership of elusive, upwardly mobile males.

Its mix of sports interviews, news and events was well balanced and on-target: It distributed more than 315,000 copies per week and claimed 85% of its readership were ABC1 males, aged between 18-45.

While I know enough women to regularly enjoy it to question that figure, there’s no disputing its ability to attract some of the biggest names in sport, including Tiger Woods, David Beckham, Roger Federer and Thierry Henry.

Its apparent demise can be attributed to several of its advertisers either closing down themselves or cutting back on ad spend.

According to a resigned Miall, Sport was ahead of its business plan last summer, "but no-one launches a company with a business plan that includes the worst recession for 80 years". 

So is the well respected and much loved magazine set to find a new buyer; unlikely.

As images of the City of London under siege are transmitted around the world, some serious questions regarding the media’s involvement in the G20 demonstrations must be asked.

Photos of bloodied protesters clashing with baton-wielding police fill the pages of every national newspaper today, providing, at least, a distorted picture of what proved to be a few well contained disruptions.

One photo doing the rounds (below) - which commanded a third of the page in the FT and the front page of Metro – shows a menacing crowd gathered around a baseball-capped protester throwing a TV at the windows of the Royal Bank of Scotland.

But take a closer look at the picture and what initially seems like an angry mob full of rampaging anti-capitalist, free-market-hating anarchists turns out to a gaggle of hacks. In fact, there are only four people in the picture who are not holding an SLR camera.

Meanwhile, in the BBC’s extensive TV coverage yesterday afternoon, the studio stayed with their man on the ground as he weaved in and out interviewing people penned in near Bishopsgate.

At one point he managed to persuade one young man to stop shouting at the police long enough to give a five minute account of what had been happening. A few grumbles about police brutality later and we find out he isn’t a bonafide protester with issues at all, but rather a journalist (albeit for a student rag). A quick pan away from the scene said it all.

When journalists on the ground are outnumbering any would-be rioters something has gone wrong. Furthermore, if all hell was really breaking out, how many of those wielding cameras would actually stay around?

So how long did it take for the world’s advertising outlook to turn to mush? Less than seven months if this week’s dramatically revised forecasts by Carat are anything to go by.

The last time the Aegis agency kindly shone its specialist light onto global ad spend was 27 August 2008. Back then, the agency cautiously downgraded its 2009 worldwide prediction from 4.9% growth to 4.8%.One winter, seven months and several bank collapses later, and the picture is decidedly darker.

Carat now expects global ad spend to fall 5.8% this year, with drops in every major market except China.More specifically, rather than the UK enjoying 2.2% growth tipped last summer, we can now expect the market to contract 7.1%, according to the agency; a huge revision with far reaching implications. And many believe it’s  still optimistic.

Let's not forget this already follows drops of 5.5% in UK ad spend in 2008, the biggest decline of any major market other than Spain.

Of course, Carat’s just the first of many advertising forecasters set to be woefully out of kilter in 2009, underlining the speed with which advertising conditions deteriorated in the second half of 2008.

But you can hear the resignation of a lead agency baffled when the normally bullish CEO of Aegis Media, Jerry Buhlmann, cushions this latest report with the disclaimer "of course, these predictions themselves are just that: our best guess at this point in time, in a market we know to be uncertain".