New ITV (LSE: ITV) chairman Archie Norman has high hopes for the broadcaster to shrink its reliance on advertising and get viewers paying for its ITV2, ITV3 and ITV4 channels, if reports from the Mail on Sunday and Sunday Times are to be believed.
We’re sceptical that enough people will consider ITV’s live multi-channel wares worth a transaction, but it’s with VOD that Norman may yet get his way…
The company has, for months, been hopeful for a paid content strategy, particularly through micropayments, and with its membership of Project Canvas, that plan just might work.
But betting on a regulatory green light for Canvas is a risky business and outside Canvas’s big tent, it’s a dog eat dog web TV market…
— Canvas hope: As senior BBC technology execs are keen to point out, Canvas set-top boxes and enabled TVs will let broadcasters sell their content either through one-off payments or subscriptions. Canvas could be the perfect mass platform for ITV to sell its football, drama, entertainment and kids’ shows to its audience. With the combined marketing power of the BBC, ITV, Five and BT (NYSE: BT), it has a good chance of taking off — as BSkyB (NYSE: BSY) and Virgin Media (NSDQ: VMED) know all too well.
— Canvas fears: But if Canvas fails to get BBC Trust approval, which seems possible given the trust’s past form on such matters, what does ITV do next? Lacking the purpose-built pay TV networks of BSkyB, Virgin Media or BT Vision, it will have to sign one or more deals with an ever-increasing pool of IPTV aggregation STB services and online desktop PC players, maybe even replicating Channel 4’s long-form deal with YouTube.
— ITV Player question: The catch-up ITV Player service already has carriage on BT Vision and VMtv — but would those platforms risk annoying their users by letting ITV charge them each time they watch ITV Player? And what happens to ITV.com? Having boosted its online ad revenue and the engagement of users through interactive tie-in games and PC desktop VOD views, ITV would have to kiss goodbye some of that growth by removing ITV 2/3/4 content from its website altogether.
ITV.com’s ad revenue grew 45 percent from January to September to £16 million — Norman and co will have to judge whether content payments will match lowered online ad income and whether the public really will pay for shows they’ve been watching for free for years.