The lead story on UK news bulletins this morning was the latest results from commercial broadcaster ITV. Two observations, even before we get into the detail of the story: big media companies, due to their prominent role in our lives, have a deep resonance with the public in ways that, say, a ball-bearing company, would never have; and the media meltdown— where traditional media business models based on scarcity and control are fundamentally challenged by the new realities of digital media consumption — is now high on the mainstream news agenda.
The focus of today’s news is on ITV’s losses and the sale, at a knock-down price, of its social network Friends Reunited.The broadcaster’s business model, heavily reliant on advertising revenues, leaves it exposed to this shift, whereas rival broadcaster (and major ITV shareholder) BSkyB has succeeded as a platform business, offering telephony and broadband alongside Pay TV. ITV has made the right noises about focusing now on its online video proposition and acquiring more of its own content to exploit. Neither will be easy, however, and successful execution will be the key here. ITV’s track record, looking at its failure to develop Friends Reunited (by no means a bad purchase at the time), is not great.