What will TV be like in 10 years' time?

In extracts from a new book, three leading industry figures, Sir Alan Sugar, Elisabeth Murdoch and Lorraine Heggessey, give their views on what we can expect to see on our screens in the near future
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SIR ALAN SUGAR: 'Advertising has had it, on television'

I'm a great believer in sticking to what you know: I know about business and the electronics industry. I appear on television; my company makes equipment which enables people to watch television; and, of course, I watch it myself. But I don't claim to be a broadcasting guru. I wouldn't presume to tell those in television how to dream up the next big thing, just as I hope they wouldn't have the nerve to start lecturing me on to how to run my business. If you haven't worked out by now what the viewers want, you need help from someone other than me.

But as an outsider with a little bit of inside knowledge, I can make some observations about the changes I see in the industry, particularly in technology's impact on the way television is organised and funded.

Satellite and cable have hardly managed to weaken the grip of the terrestrial broadcasters: BBCs 1 and 2, ITV, Channel 4 and Five. This is in spite of the fact that - in theory at least - there is far more choice out there for the viewer. In the past couple of decades the major change in television has been the creation of extra channels through satellite and cable. With the advent of digital TV, we should see an ever-expanding range of choice. It gets easier every day to set up as a broadcaster.

Given that, increased competition should mean it becomes tougher for the individual broadcaster. But the Big Five don't seem to be seriously challenged. They're not even breathing heavily yet. You might argue that BSkyB is the obvious success story of the past 10 years. But the truth is that their success is almost entirely down to the rights they own for sport. If they hadn't spent big money on football, I can't help wondering whether they would have progressed as far as they have. Would we still see an EPG (Electronic Programme Guide) with 1,000 channels on it? And when it comes down to it, could any of those channels survive in their own right? Frankly, I doubt it.

Even Sky One is not that popular for the simple reason it is not available to everyone: the pool in which it can fish for viewers is necessarily limited to the seven or eight million Sky subscribers. In terms of its appeal to those people, it does well, but we should really be considering the whole audience in this country: 20 million homes, the majority of which have not yet signed up for subscription TV.

The point of entry to those homes could be digital terrestrial, as Freeview becomes more popular. Yet there again it is the Big Five channels that attract most of the viewers. None of the 10 or so "secondary" channels, as I consider them, is especially popular or could survive in its own right. So I believe in the short term - the next 10 years - the Big Five have little to fear from the new kids on the block. Their major concern will be fighting among themselves.

But I don't want to give the impression that the Big Five can sit back smugly and assume that everything will carry on for them just as it has for the past 20 years. If I headed a commercial channel, what would worry me right now is the device my own company makes, which is beginning to revolutionise the way we watch television in this country: the PVR, Personal Video Recorder, essentially a set-top box incorporating a hard disc drive. Within 10 years PVRs will be as ubiquitous and as cheap as the DVD player is today.

Sky+ was the leader in the field, but the concept of a personalised recording device that understands your viewing preferences is not restricted to satellite. You can buy PVRs for digital terrestrial that work in exactly the same way. The precise technology doesn't matter: PVR, VoD - video on demand - or DVD recorders. Once you have tried one, you are never going to go back because you can pre-programme what you want to watch; you can store programmes, advance them, and even make up your own television channel if you like. We are close to the tipping point where they will become mass market.

But why are they so revolutionary? One of the main reasons I own a PVR is so I can skip adverts. I haven't watched an ad spot for more than a year now. Everybody is going to be doing the same soon. So in my view, advertising has had it, on television.

It will be a huge problem for broadcasters. How can you fund commercial television without advertising? My warning, if you work at a commercial television channel, is to get another job, because at the moment it is advertising that pays your wages. In eight or nine years' time, the advertisers will not want to pay you because no one will be watching the adverts. It is as simple as that. Defect to the BBC now.

The BBC will come out of it smiling: it has the licence fee. But commercial broadcasters must look to new ways of raising money from advertisers. They need to lobby the Government and Ofcom to allow product placement, for example. The fact that the whole viewing public will be skipping adverts as a normal course of events means we will need to become used to seeing programmes where people openly talk about products. Perhaps camcorder manufacturers will fund new technology shows that discuss their own latest model. Instead of a character in Coronation Street saying "I have to collect my car from the garage", he will announce: "I'm just off to pick up my new Toyota Yaris from its service." If it is done well, it will sound perfectly natural: just the kind of everyday comment we've all made at some time. Part of the creativity of the programme-making process will become the inventive ways people discover of embedding commercial content into the programmes themselves.

Will viewers watch programmes with advertising content? Of course, if the programmes are good enough. Programme-makers know that better than anyone else. What gets people to watch is word of mouth. The Office, 24: when a brilliant new programme hits the screen, it gets talked about and people tell their friends to watch. The Apprentice built its audience by word of mouth. It doesn't matter how much promotion a programme gets or how much product placement it contains, viewers will come if the content is good.

Advertisers and broadcasters must learn to be cleverer, and to persuade the regulators that sponsorship and product placement are in the long run essential for the survival of television as we know it. Whatever the solution, my personal opinion is that the days of adverts on TV are numbered. If television cannot supply advertisers with the means to promote their products, they will spend their money elsewhere.

ELISABETH MURDOCH: 'The best plan is to invest in creative staff'

By 2015, the world we live and work in will have been shaped by new patterns of consumer behaviour enabled by new technology. Ubiquitous PVR usage, broadband VoD, iPods and other storage devices will lead to near simultaneous distribution windows for content across multiple territories and media, giving consumers flexible access to their favourite programmes. As the music and film industries have found, we must confront a world where consumers demand and pay for immediate and total access to our product.

People today use technology to take what they want if their desires are not serviced by (what to them) are antiquated distribution practices. I don't believe we have a generation of entertainment consumers who can't grasp the morality of IP theft, but I don't blame them for thinking it's industry's problem, not theirs. A positive solution like iTunes (which caused the explosion in legal downloads) is proof that we can take economic advantage of the opportunity new technology provides for us.

What does all this mean for independent producers? Quite a lot, I think. We must carve out our place in the future media entertainment value chain. Our relationships with broadcasters, distributors, advertisers, platform operators and viewers must adapt to new funding models and new industry economic drivers. Although change provides us with unprecedented opportunity, we must decide how best to protect and exploit our premium value as content creators and participate fully in the creation of new revenue streams.

The reports of advertising's untimely death I simply don't believe. It is currently still the biggest source of revenue for the broadcast TV business, although it is growing more slowly than subscription. What is more interesting is to forecast the forms advertising might take. Recently a Chemical Brothers album spot allowed viewers to sample new tracks by pushing the red button on their remote. More than 280,000 people responded to this innovative but obvious advertising form.

In 10 years' time the way audiences consume media content will have changed dramatically. I, for one, am looking forward to the day that I can shop on my EPG through the back catalogue of all programmes. It is not that far away: a company called Promise.TV showcased its new product at London's OpenTech conference in July 2005. It archives an entire month of broadcast spectrum output and allows you to browse and sort using a very iTunes-like methodology. The BBC is already planning to beta-test a service that allows you to access anything broadcast over the previous seven days. In this world, advertisers will need to embed themselves further into the media - either through product placement, or non-interruptive sponsorship that remains attached to a programme brand.

Obviously, none of us will be able to take advantage of consumers' appetite for our product unless technology can provide secure encrypted delivery of our programmes to any of these new devices. And none of these new means of delivery will take hold until we (and the US studios) establish the ground rules of profit participation. Producers, broadcasters, platform operators and advertisers will need to work in close collaboration.

Thankfully, the foundation for independent producers to grow our business in this exciting world was laid down last year with the new terms of trade. Ten years from now, we will have a decade of programme libraries which will never have been more valuable and we will have a much lower cost of entry to international distribution of our own product.

Ultimately, I would assume that sense will prevail, and that between producers and broadcasters the reliance on the other will become more evident rather than less. As the need for distinctive high-quality programming in every genre becomes ever more prevalent, pragmatic partnerships must emerge.

The best plan for the future in all this change and uncertainty is to invest in creative staff, trust them and their ideas, reward them and create organisations which are prepared to take risks, to back creativity and be interesting and exciting places to work.

A final thought: a man, Ze Frank, became famous when he created a collection of video invitations to his 21st birthday. He sent the link to 17 friends, and three days later hundreds of people were watching every hour. Ultimately 20 million visitors watched it. Creativity breaks through. While the individual viewer holds the balance of power - so do we.

LORRAINE HEGGESSEY: 'We have to think about entertainment in its broadest sense'

Two thoughts strike me about television today. The first is that we have been riding a wave for the past few years, a wave of reality and celebrity-based programmes. Many have been immensely successful, and indeed could continue to be. But we can already see the imitators beginning to sink. The laws of television suggest this wave has begun to lose its force. The smart surfers have let go already.

The second thought is that we are at a point in television where everything is changing. There are more channels than ever before coming on air, creating extraordinary opportunities and unexpected successes. The model is no longer one where executives from the big networks ponder and point the way. Subjects that seemed of niche interest only can suddenly break through into the mainstream: poker on TV, for example. These are cultural phenomena that kindle and spread across a number of media platforms, so that the interest in poker on TV is fuelled by the interest in poker on the internet, and vice versa.

So as canny programme-makers and broadcasters, we should be aware that the exciting opportunities now are about how many platforms we can exploit with a single idea. We should be looking to develop fully rounded projects, and thinking of ways to turn our creative idea into not just a programme but a lifestyle, embracing a total experience that can be accessed through television, broadband or even the mobile phone.

BIG BRAND TELEVISION

Will the analogue switch-off change viewing? I doubt it. What it will mean is that more people will be watching in a multichannel universe. Although the main channels may well remain the dominant players, there will clearly be greater fragmentation of audiences, and broadcasters will have to compete harder to maintain their share.

So it is perhaps not surprising that over the past few years we have seen the rise of the attention-grabbing mega television event. Increasingly channels are prepared to wipe out the schedule for a night, a whole week, or even a period of weeks to accommodate grand-scale television that gets talked about. Big Brother effectively dictates the Channel 4 schedule for the time of its run. These events have changed the way people view television. Watching a particular series has become a lifestyle.

I firmly believe that television will remain the starting point for big brand programming. It will always command audiences greater than those watching video on demand, or programming streamed to the computer or to a mobile. In 10 years from now, channel loyalty could even be stronger than it is today. The channel identifies the brand: you trust the BBC or the Channel 4 "kite mark" because it reassures you, suggesting that what's on offer is for someone like you. In the end, the viewer has only so many hours in the day to sample what is on offer. Channel branding helps them to find programmes to their taste.

LOCATING THE NEXT WAVE

But how do we identify the next wave, and make sure we are in a position to ride it?

One of the best ways to stimulate ideas is to get programme-makers from different disciplines to brainstorm together. Get an entertainment producer to think about a factual show, or a drama producer to think about an entertainment show; when they come together something entirely original could emerge. This technique is what informed some of the most successful celebrity-led factual programmes of the past few years.

The same approach could be useful in the quest to explore new forms of drama. To try to devise successful hybrids that cross the boundary between fact and fiction. Many drama-docs have sat uneasily on the screen, but there have been some interesting experiments, notably in the specialist factual genre, with history- or science-based stories such as Pompeii and Super Volcano taking a strong factual premise and projecting a dramatic scenario over it. This could be one of the most promising areas to prise open in the future.

Whether you are a TV executive, a director, an assistant producer or a researcher, my belief is that it is important periodically to jolt yourself out of your comfort zone. There is no better way for exposing yourself to new creative influences. It is easy to become insular, and forget there is a real world of real people beyond. How often do you get to the theatre? To a concert? What books are you reading? Do you ever speak to people who don't work in television? We have to push ourselves outside our narrow box and think about entertainment in its broadest sense.

GLOBAL TELEVISION

Our horizons are expanding. Not only do we have to think across different platforms, but we also have to begin to think globally.

Independent production companies have to learn to forge worldwide connections in order to stay in business. talkBackTHAMES is part of a global concern; I meet colleagues who are responsible for programming all over the world, and learn from them what works in other countries. But it is not always the shows you imagine that turn out to win huge international success. Television is the opposite of an industrial process; the excitement is that it is hard to predict what will take off. How Clean Is Your House?, for example, is a particular hit in France, and doing well all round the world. Likewise, The Farmer Wants a Wife, a strong observational documentary series, is one of the top-rated shows in Holland and has been a success in many territories. If you deliberately set out to create a global hit, the chances are you will fail; if instead you concentrate on getting it right for your own domestic market, it has a good chance of translating elsewhere.

I find it heartening that the UK is still the television laboratory for the world. My international colleagues look to us to come up with the new formats that will eventually sell worldwide. I believe it is because our broadcasters are more willing to be experimental. Perhaps because public service broadcasting is so strong here, channels are still prepared to take a risk commissioning original content. It is what gives us an edge in the global marketplace, and long may it continue.

Excerpts taken from UKTV's new book 'The Next big Thing' published by Premium Publishing on November 14, priced £9.99. UKTV are offering a discounted price of £7.99 for 'Independent' readers - copies can be ordered by calling 0208 743 5942 or by visiting the website www.premiumpublishing.co.uk

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