The Eyeballs Have It

The fact that ITV, the UK's main commercial broadcaster, is rumoured to be thinking of selling its share in SDN, its subsidiary that sells slots on Freeview shows how totally clueless this company is. Not really owning the audience you are delivering to your customers (the advertisers) is a precarious place to be.

Its nemeses, BSkyB and BBC, both have an iron lock over their distribution, and to see ITV reverting to be nothing more than a 'super-producer' and let go of the toeholds it has built in the final eyeball business is staggering, in my view.

As Google and NewsCorp have shown, he who owns the eyeballs wins. ITV  never had to worry about this in the days of analogue and terrestrial broadcasting. Now they just don't get it.

Unfortunately, OFCOM also place far too much emphasis on the way TV was, not on the way it will be. 

ITV is an effective lobbier, but it has been fighting the wrong battles - all it would take for them to collapse as a business is to lose their guranteed slot on the EPGs of Sky, Virgin and Freeserve. I reckon that retaining them commercially would cost £50m a year. In the meantime, in this longtail world, they've all but given up on local, let alone hyperlocal, broadcasting.

The reality is that the UK television business, once the envy of the world, is a basket case thanks to the commercial dominance of Sky and the public sector imperative that buries the private sector.

One thing that is rarely noted in the debate about UK television is that there is a huge economy of scale in media. You pour 'money into light' and you try and sell the resulting production. From The West Wing to Lost, from The Simpsons to 30 Rock, the US' best output is paid for by a much larger market and can then be exported to a global market. Japan, China and India have similar advantages in the production world. Even France and Russia have advantages.

Whereas the UK is more than happy to consume US output, the US is far less benevolent when it comes to originally produced UK content - even The Office had to be re-produced.

The real irony is that English media is now beginning to suffer from the pressure that has long assailed the media of Europe's smaller cultures.

The trouble is, companies like ITV still hang on to their past strength - an ability to deliver a large, badly defined, geographically restricted audience. This is in a world where the real value will be with global tribes, narrowcasting and monetizing an audience of one..

Navigating the transition to this is the key to the success of any TV company in the near future.