Broadcasters must build brands, form partnerships and diversify, writes Five’s Dawn Airey.

What is this world going to look like when everybody has automatic access to super-fast broadband? The policy papers are full of references to exciting new possibilities for businesses, public services and local communities, with millions of new jobs being created and enormous wealth flowing to the economy. They paint a glorious picture of a new Golden Age. But, at first glance, the effect on traditional broadcasters looks more like a painting by Edvard Munch.

Between 2005 and 2009, the UK TV ad market declined by 30% in real terms. The economic downturn and the advent of new technology have created a perfect storm. The economic cycle will recover, but the structural pressures are not going to go away.

Soothsayers suggest that viewers don’t need our schedules - they’re using PVRs and watching YouTube; programme-makers won’t need our pipes as they can build one-to-one relationships with the viewer; advertisers, who used to lavish analogue pounds on us, will now only give us digital pennies, so sooner or later we will not have any money to make programmes.

Unless we take account of how technology is reshaping the world and create new ways to reach out to audiences and diversify revenues, we probably deserve this nightmarish fate.

Broadcasters, content producers, advertisers, policy-makers, regulators and viewers need to consider the implications. We are facing substantial pressures, but might not some of what we’re told will lead to our inevitable demise actually make us stronger? Linear TV is becoming an ever more enjoyable experience. Most of the growth in digital TV viewing is coming from commercial networks’ spin-off channels.

Gaining additional viewers

In the non-linear world, some may be deserting the broadcast stream, but they’re watching the programmes they missed on linear TV. In Australia, Seven has the rights to US drama FlashForward, which Five shows in the UK. When we aired the pilot, we had an incredible response, with 3 million viewers. During the same week, we gave it additional windows on TV and on the web, attracting another 4 million.

Meanwhile, linear TV lives on - 18.3 million people watched the 2009 final of Britain’s Got Talent. It’s clear that TV is still the most effective and efficient way of building brands.

So how do we ensure we have sufficient resources to continue to fund high-quality, original content? We can start by recognising that we’re not simply ‘broadcasters’ any more. We are in the content business and the business of building brands - of funding them, marketing them, distributing them and, critically, monetising them. That can be on broadcast TV, pay-TV, IPTV, the web, mobile devices, whatever.

And competition itself is a good thing. We need to nurture open-access environments, and move with the times. The industry needs to produce less expensively, organise workflows more efficiently and acquire programmes more cheaply. But that doesn’t have to lead to a decline in programme quality. Five cut its programme budget last year by a quarter - and yet ratings went up.

We also need to develop additional revenue sources. We should start by working our existing programme assets harder and developing franchises where we share in the lifetime value. Fox’s Glee is a masterclass in brand-building. Songs from the show have spawned hit singles, two bestselling soundtracks and a concert tour.

Five has its own examples. Our Milkshake! pre-school block contains iconic properties. Last year in the UK, Peppa Pig merchandise outsold Noddy and Winnie the Pooh combined, delivering about £250,000 to our bottom line.

Finally, whoever heard of a broadcaster running a mobile network? Five’s French sister, channel M6, generates ¤1.4bn (£1.25bn) in revenue, and only half comes from broadcast. The rest comes from interactive assets and a 3G joint venture with Orange, which has 1.5 million customers.

Partnerships represent a way forward, and that includes those with other broadcasters. In Australia, the networks have co-operated to build a new market for digital terrestrial TV. In the US, cable operators are working on Canoe, a next-generation advertising platform for both online and offline. In the UK, meanwhile, broadcasters and telcos are developing the country’s biggest IPTV platform, Project Canvas, and Five is right at the heart of it.

Perhaps the picture is not so bleak. Building a sustainable future is about investing in high-quality content, because that’s what the viewer wants; embracing new technology, because that’s what the viewer is already doing; and recognising the value of new businesses and new partnerships, as that is what allows the investment in content and technology.

We mustn’t rail against technology. Upload your own content onto YouTube. Wrap your advertising around it, which you sell. Enable users of the most popular video site in the world to discover your content, become advocates for it and make your channel and programme brands even more famous. Embrace technology. Work with it. You may just discover a whole new world of intriguing possibilities.

This is an edited extract from the international keynote address to the Australian Broadcasting Summit by Five chairwoman and chief executive Dawn Airey

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