Tuesday, August 18, 2009

ITV Disunited

Nothing highlights the malaise facing the media industry more than the firesale of Friends Reunited.

This was the original Facebook, developed in the UK, largely to help high school friends get back in touch. It was bought, at the height of its popularity, by the UK's largest commercial broadcasters, ITV.

This week it was sold for nothing - the purchasers of the service valued its sister site, Genes Reunited at £25m, but considered Friends Reunited, with its 3m monthly users, more or less worthless.

So, another ITV online initiative bites the dust.

But the idea behind the purchase of Friends Reunited was a good one. The popularity of shows such as the celebrity family tree programme Who Do You Think You Are demonstrate what potential there was.

The problem was in the execution (as it has been with other ITV services such as the malfunctioning ITV.com and ITV Local) and the inability of senior management to develop 360 media propositions that straddle online and offline and embrace publishing, data services, online services, with traditional TV being the audience generator.

The problem that broadcasters have is that they find it very difficult to move from a dollar to a cents world. The thinking required is utterly different and one of the problems of television is that there have always been strong Chinese Walls between the programme making and money making parts of the company. Three million users sounds like a lot, but online that's an audience that I reckon is worth no more than £250k a month in ad revenue; that's chickenfeed in the TV world. Or at least, at the moment this is a relatively small sum compared to what a minor cable channel will currently generate, but this latter figure is falling precipitously.

To be fair to ITV they did concentrate on SMS and premium lines, taking the fast buck, but even here their execution was poor and resulted in the ITV Play service having to be shelved.

Building a media company now takes a multi-strand approach with a balance of near, medium and long term objectives. ITV is not alone in struggling to tackle this. All over the world there are television broadcasters trying to get their heads around 'this online thing'. Talking 360 media is one thing; doing 360 media is something else.

The only silver lining to all of this is that the poor sod who takes on the role of CEO at ITV has only one way to go when it comes to execution at least.