With the death of traditional advertising, UK broadcasting needs alternative ways of making money - and soon.
With the death of traditional advertising, UK broadcasting needs alternative ways of making money - and soon.

The revolution in the media and broadcasting industry is now well underway. This week ITV launched ITV4, while BSkyB conceded the phenomenal growth of Freeview by launching Sky 3 on the DTT platform.

Two years ago it was national news when the combined viewing in multichannel homes overtook the viewing audiences that either BBC1 or ITV1 individually could command. Today we take it for granted. Sky has also unveiled details of its new mobile phone channels through Vodafone. Sky is also acting to position itself beyond the digital satellite age. It has made an ambitious move into broadband through its acquisition of Easynet and other acquisitions are expected.

As we report this week, Channel 4 is about to become the first major terrestrial channel to launch a channel via mobile phone. ITV has already confirmed it will do the same and we can expect a stream of such announcements over the coming months.

In all of this though there remains the question of how these different services are going to pay for themselves - and the content they depend on. It may happen more slowly than some observers suggest, but the death of the 30-second spot will happen. The success of Freeview may have breathed new life into channels funded by ad breaks, but it has simply delayed the inevitable. Anyone who has experienced the ad-zapping thrills of a Sky+ box knows that it's simply a matter of time and technological take-up before the 30-second ad is no longer viable. What is clear is that the whole broadcasting ecology is facing a potentially massive gap in funding.

ITV spends more than£1bn on programming for its channels, C4 around£583m while Five's budget is£200m. At some point, that money will begin to dry up. The billion dollar question is what will replace it. How much will people pay for content via their phones? If they want content on demand, what price tag can be attached to it? If they want "ad-free" programming, what would they be prepared to pay for it? Where does the on-demand world leave the old subscription model of pre-packaged content? No one has any answers at the moment and that worries everyone.

That is also why the debate about top slicing the licence fee isn't going to go away, as the BBC remains the only major broadcaster that knows its revenues are secured for the next decade, come what may.