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ITV dips its toe into paid content

ITV dips its toe into paid content

Dominic Mills new
Last week ITV announced that it will become the first commercial broadcaster to give mobile viewers the option – at a price – to watch catch-up content without ads. It’s an interesting test of an increasingly important part of the media eco-system, but is it really going to work? Whatever happens, you can bet ITV’s competitors will be watching like hawks says Dominic Mills.

Here’s a thing: after offering the nation’s grateful viewers free TV for more than 50 years, ITV is politely offering us the chance to pay for it.

But don’t panic: this isn’t a sudden reversal of direction, more an experiment in testing the consumer appetite to pay for stuff.

Last week, ITV announced that the latest version of its iOS ITV Player app would have a paid-for option.

Cough up the princely sum of £3.99 a month and you can watch ITV on your iPad, iPhone or iTouch without any of those beastly ads.

Now we know what’s going on here. Anticipating the long-term decline of its traditional business model (actually, it’s currently in rude health, but that doesn’t mean it’s always going to stay that way), ITV is expanding and diversifying its revenue streams.

It’s clear a lot of thought has gone into this. The key is in the difference between the free offer and the ‘premium’ one.

Go for free and you get the standard seven days’ worth of catch-up plus live simulcast on ITV 1 and ITV2.

Go for the ‘premium’ and you get a whole lot more: 30 days’ worth of catch-up, the full range of ITV channels (all five if you include CITV), and no ads. The app also supports viewing via wi-fi and 3G. The catch: it doesn’t include simulcast – presumably on the basis that this is not technically possible (yet).

So, is that a big enough gap between free and ‘premium’ to justify £3.99 a month – given that you can also fast-forward through the ads or use ad-blocking technology? ITV has an installed iOS user base of 7 million, which suggests that it has a robust and wide enough range of viewers on which to test the proposition.

If you’re looking for clues as to whether people will pay a) to escape ads and b) for something they used to/can still get free, there aren’t that many exact parallels out there. Yes, there’s evidence from the print world that consumers will pay for tablet apps when they can access web sites for free. It’s (more or less) the same content, but you’re paying for a better user experience, not an ad-free one.

Then there’s Lovefilm and Netflix (both more expensive), plus Sky – but the content propositions are different.

Perhaps the best parallel is Spotify, where the latest figures suggest it has over 6 million paying users, about a quarter of its total user base. And while it’s a different medium consumed in a different way, the key is that it has successfully moved a significant number of users from free to paid.

It would be an exaggeration to say that ITV’s future depends on the success of this move. But it’s an interesting test in a small part of the media eco-system that competitors – and other media owners – will watch with interest.

Cannes: another ordinary year for the UK

It’s that time of the year when adland’s ‘chatterati’ pack their sun-tan lotions, hangover kits and load up on Euros for the week-long pilgrimage to the rip-off capital of the world (aka Cannes).
It’s also that time of the year when Cannes prediction season is in full swing – like here and here. (Interesting, by the way, that Pinterest has become the medium of choice for our soi-disant soothsayers.)

By common consent, McCann Erickson Melbourne’s lovely Dumb Ways to Die safety viral – 49 million views and counting – for the local Metro system is a red-hot favourite. It swept the board at last week’s D&AD awards and is thus top of mind.

As in recent years, there aren’t too many hot UK contenders. adam&eveDDB’s John Lewis Christmas special is one; AMV BBDO’s sheepdogs ad for Guinness another; and C4’s Paralympic Meet the Superhumans series a third contender.

Other than that, there doesn’t seem too much for the UK contingent to get excited about, a far cry from the glory years of the 80s and 90s. Apart from the fact that other countries have just got better, there are myriad reasons why this might be (cautious clients, sclerotic agency structures, unwillingness to take risks, changes in jury make-up and block voting are just a few).

Personally, I will feel cheated if Dumb Ways to Die wins. It’s entirely charming, but it’s hardly new or revolutionary, and making public safety ads for small clients is a damn sight easier than taking on a big marketing challenge for a serious client. Besides you could stick any public transport system logo in it and it would work equally well.

My own personal favourite is Ogilvy and Mather’s ‘sketches’ video (below) for Dove: a brilliant idea for a clever campaign and a proper advertiser trying to do something real. And check out the parodies too.

The mutation of Tesco

There used to be an army of analysts and commentators who studied every move Tesco made – as a retailer.

Now, as it ramps up its digital activities, it’s the turn of media analysts to focus on its move into entertainment.

Putting Blinkbox (80% owned by Tesco) boss Michael Cornish in charge of digital operations is a statement of intent. Setting up a digital hub in Farringdon (almost Tech City) is another, as is the hiring of 150 digital staff.

As of now, Tesco has four digital entertainment brands: Blinkbox, We7 (music streaming), Mobcast (e-books) and Clubcard TV, which together add up to a multiplicity of routes into its massive shopper base.

The logic is clear. Why shouldn’t it use its powerful relationships with its customers – built, via Clubcard, on a huge knowledge of their consumption habits – to hook itself into them even more firmly? Look at what Amazon’s done.

If I was a shareholder or institutional investor though, I wouldn’t be so sure about the giant, mutating Tesco. Am I buying into a retailer or a media/publishing/entertainment company?

It’s in retreat from a disastrous retail expedition in the US, and the repair of its damaged UK (the key profit generator) retail operations remains a work in progress. Tesco might be better off focusing on that for now.

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