The TV industry is changing beyond recognition. Even the concept of ‘TV’ might itself be on the verge of extinction because visual content is available today on phones, laptops and MP3 players as well as your home entertainment centre. The only way to survive is to consolidate or innovate. We think of the change in our industry as being sudden, but in fact it’s been decades coming. Cable and satellite innovations led people to desire choice, but the internet must take the credit for accelerating the change. Think about the existing model – I hesitate to call it old because it is very much still with us even if it is still dying. Broadcasters would originate channels which would contain a broad spectrum of programming and advertisers would be happy to pay without any handle on who was watching. Independent producers have been kept well away from the paymasters (the advertisers) and have only to concentrate passions on absorbing programming. Then there’s the subscription model. You pay a monthly fee for a lot of stuff – much of which you don’t want. The sheer wastage in this process is mind-blowing, but with the advent of the internet and innovations in audience measurement it has become possible to have a very clear understanding of audience demographics. So advertisers want targeting and are less willing to go for a scattergun approach. But they are also very conservative at the same time – so although traditional TV advertising is falling back – the difference is not being spent on digital – and it my opinion that it will be many years before anyone will develop a viable ad-funded TV model. The solution has to be around generating multi-platform content in conjunction with ancillary revenue coming from a variety of sources like games, books, ringtones, virtual worlds. The producer has to become a well-rounded business-person – equally at home in the world of advertising and technology – with different versions of the same content being produced across all platforms. So we see that advertising is not sufficient to fund programming in itself, but what about subscription-based models? Well these are in trouble too. Traditional viewers who were paying a monthly fee are also beginning to realise that they should be paying for what they watch. There are now people – many people actually – mainly in their teens and twenties who have never paid for music or televisual content. Although people will pay for a DVD, once any content hits the internet, it’s perceived value diminishes. I call this phenomenon the Dash for Zero. The irony is that research has shown that heavy internet users are also heavy TV viewers. It’s just that they’re probably multi-tasking. texting, surfing, viewing, instant-messaging – all at the same time. Research has also shown that an audience becomes more emotionally involved with programming if there is an associated website and backchat channel or blog. So if we have heavy content, consumers and targeted audiences, I believe that through innovation viable business models will emerge. Change is accelerating and the existing model’s demise might happen sooner rather than later. Strangely, existing broadcasters will themselves hasten the process through their own innovation! Take BBC iPlayer, for example. This is effectively a portal to BBC programming. Content from all audio and television channels is broadcast both live and available for seven days. The iPlayer has proved more popular than the most optimistic forecasts with up to one million people a day using the service. However it is educating its viewership to expect to be able to watch content on demand and it is turning the concept of channels into video portals. Let’s look at Shine as an example of consolidation. In the last 18 months, Shine has been a leading consolidator, buying Kudos, Princess Productions, Firefly and Reveille and making the twice Emmy-awarded Life on Mars, plus Spooks, Masterchef, Ugly Betty, Merlin and many other well-known shows. I believe that as broadcaster budgets become tighter they will look to a smaller number of big players whom they can rely on. And I believe there is still no substitute for a gripping narrative and an original format – and this simple rule will apply whatever business model ultimately emerges. There are no surprises about our acquisition criteria. Basically, we were and are looking for strong, growing, well-managed profitable businesses with an established track record and a great library of well-known content. As well as, of course a healthy roster of forward commissions. The existing model, which relies on the broadcasting commissioning model is dying because there will be less money from advertisers and demand targeted audiences. It’s dying because punters no longer want to pay for content especially content they don’t even watch – this will fundamentally affect the business models of broadcasters and cable and satellite companies as well as impacting independent producers. Consolidation will allow producers to ride the storm as new models emerge. Innovation is the key – innovation does not require you to be big. Audiences on the hand, are more passionate than ever about media and they want to be involved. ASIAIMAGE