Micropayments. It has a cute sort of ring to it doesn’t it?
“Mommy, look at that sweet little micropayment! Can we have one Mommy, can we? I promise to look after it, and take good care, and not let it die a terrifying, lonely death like the parrot Daddy brought home last Christmas.”
“Oh darling, try and forget about the parrot now. It’s been weeks since we heard any sound from the chimney breast, and I’m sure Polly Parrot has gone to a better place by now...”
“Like Center Parcs, Mommy?”
“Yes darling, the Center Parcs afterlife for parrots...”
Drifted off into a Stephen King world there, for a moment...
This week, ITV didn’t so much launch, as nudge an announcement that they would be placing their channels behind (sorry to mention the ‘P’ word again) paywalls, and asking you to pay for individual programmes through micropayments. Except they didn’t say that, it just made life more convenient for some newspapers and journals to report it that way.
If we study the detail of what Adam Crozier (Chief Executive, ITV) actually said on Wednesday, it becomes clear that ITV 1,2,3, & 4 will remain ‘free’ to the viewer, whilst they take the interesting step of placing the high definition versions of 2,3 and 4 onto the SKY HD package. That isn’t a paywall. It’s consolidation.
ITV executives will be fully aware that the attraction for placing those channels behind a pay per view barrier, on their own merit, will attract subscription rates struggling to achieve double figures, never mind the number of sign-ups to make them self supporting or even viable loss leaders. However, by positioning them in a banded link up with a (growing) series of high def brother channels, ITV will be far better placed to develop and blend income.
The Holy Grail, the cash cow if you will, for SKY, remains the Premier League and Champions League football. The House of Murdoch is built upon the desire of the nation to watch live coverage of Wayne, Fernando and Didier. For any of the less desirable channels, any link with the golden goose is welcomed, both in terms of building credibility, and more importantly, to snatch the financial crumbs falling from the goose’s lips (do geese have lips?).
SKY’s football coverage is now fully immersed into the pitch of high definition. Getting any foot under the same table is a comfort to fellow broadcasters in these challenging times, but to present an opportunity to play a delicate game of football footsie under that same table, is too much of a temptation to decline.
In these changing times, today’s clear sighted vision of the future for media becomes tomorrow’s hangover, which is about as far as ITV dare look. If we strain our vision to the horizon, where all television is presented in high definition and in three dimensions, then those same ITV executives’ shudder of doom can be felt along the entire south bank of the Thames. That package would no longer hold its niche appeal, and (nightmare scenario) all ITV channels would have to support themselves through advertising; and advertising on television is going through a bigger crisis of confidence than the world’s most neurotic teenager.
So step forward micropayments. As with the reporting of the plans for the high definition channels, there have been misunderstandings in the reporting of these ‘one-off’ payments. Although the merits of attempting to milk even more viewer money from the Simon Cowell talent shows must have been considered, ITV have no plans to present the viewer with pay and display programming. They can’t afford the risk. Shows such as ‘X Factor’ and ‘Britain’s Got Talent’ need to engage with the biggest possible audience to maximise emotional buy-in and the concomitant ‘need’ to vote (and by default, pay) for that emotional choice. A ninety per cent loss of viewers, despite the revenue from the remaining percentage, would be catastrophic for the business plan.
So what exactly do ITV mean by micropayments? How strong is your devotion to those ‘Go Compare’ commercials? The Iggy Pop insurance ad? Those ‘send us your gold teeth and we’ll send you a cheque in return’ ones? Micropayments will give you the option to watch (for example) Coronation Street without the usual accompaniment of the jarring, clattering parade of salesmen knocking on your screen.
No announcement yet about the envisaged fee, but let us undertake a touch of surmising, and continue with the example of Corrie, which airs five times each week.
We’ll pretend to be ITV executives, so dress down a bit, and hang your legs over the side of the chair.
Let’s give the viewer three options for watching Coronation Street: firstly, we’ll let them carry on as they are, everything remains the same; they will get the sponsorship stingers and the commercials for the most dumbed down products we can shove at them, and we won’t charge them anything at all for the ‘privilege’.
Secondly, we’ll offer them the choice of paying for individual episodes during the week. Let’s charge them fifty pence per show. For this, we may still show them the ‘sponsored by’ logos, but absolutely no commercials will spoil their enjoyment of Kevin, Tyrone and Molly’s Shakespearean love triangle.
Thirdly, we’ll offer packages; a pound for a week and five episodes; three pounds for a month, twenty five pounds for a commercial free year. Did we mention that for the packages we’ll make it easy for you by setting up a direct debit agreement with your bank? So, don’t worry about forgetting when your payment time is completed, we’ll automatically renew your payments for you (and guarantee our income).
OK, that’s our time for pretending to be high powered executives over with. Now let’s go back to our usual place as consumers. Will we buy into it? Maybe you hesitated. That’s the problem ITV, and every other media outlet faces at the moment. Nothing is clear. Nobody knows.
Just as Mr Murdoch is gambling that sufficient readers of The Times will pay for viewing their output online, so Mr Crozier is stepping into the unknown with his HD and micropayment plans. And just as newspaper proprietors watch anxiously for the outcome of Mr Murdoch’s leap of faith, so any number of audio and visual providers will keep a very close watch on the strategy being developed at ITV headquarters.
Meanwhile, “Go Compare, Go Compare; you can be sure when you insure with Go Compare you get the lowdown and costs can go down; and you'll thank you're stars that you went to Go Compare”
Terence Dackombe, August 2010
