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April 4, 2008

William Poel: The next big media opportunity?

Most of us live in a world where the rising price of beer and heating a large shed is more immediately pressing than the impact of distant financial cock-ups on the UK events industry, but Emylou and Billy Bob's mortgage arrears are clearly now our problem as much as theirs. Last year will be remembered for the term ‘subprime’ as much as anything, while the state of the UK events business barely causes a flicker on the global trade seismometer.

Yes indeed, the tectonic plate-shifting antics of greedy US financiers and their dumber disciples means that your business is being squeezed, and the UK events industry will find it harder to turn a pound in 2008.

Globalisation means that a mortgage scandal in the trailer parks of the US can lead to a run on UK bank Northern Rock, adjustments of interest rates around the globe, and the probability of a worldwide recession. Globalisation also means that although the exposure of the UK finance industry to the subprime problem was relatively small, the consequential matter of confidence and the credit squeeze in a country like Britain, which is addicted to funding through credit and government deficit rather more than any other in the European Union, is highly likely to lead to a recession. In fact, the supercilious and supine nature of our financial institutions, exemplified by the Bank of England's fumbling of the Northern Rock crisis, virtually assures it.

Creating a need
In times of recession, people and businesses are required to focus on what they really, really need. For example, with the internet providing the global showcase for anything and everything, will we still need exhibitions as distribution points for promotional mouse mats, printed pens, tacky balloons and warm beer at £5 per plastic cup full? The previous experience of recessions is that multinationals protect their home markets first, business travel slumps and global operations dump their foreign marketing adventures, which they feel they can manage from afar. And never before has it been so simple and attractive to manage anything from afar.

Remember that the US business ethos that forms the core of many globalised businesses has a heritage of ‘respect’ for their ‘foreign workers’ that began with the cotton industry. Most other countries that now house global companies, such as Korea, Russia, Japan and China, are also a bit short on historical evidence of generosity towards gullible Europeans who are down on their luck. And I cannot imagine India feeling warmth towards the mother country that will soften any hard financial choices that they may face.

The next big media thing
However, there is a huge opportunity just around the corner for the UK media (and in that we must include events) industry, but hardly anyone seems to have noticed. And it's all to do with satellite TV.

The BBC once led world TV technology, and was still leading most aspects of broadcast innovation when its worthy fluffy-luvies decided to disband its research and development departments. Then by pure accident the UK media industry led the world of direct satellite TV for a brief moment with the clueless BSB. And now, thanks to BT's skill at bamboozling politicians, our lack of investment in vital fibre infrastructure means that the UK has been a showcase for the immensely successful Sky platform. This nicely illustrates the efficiency of a monopoly-led by a dictator, versus a quango comprised of space-filling time-servers, and a collection of media dinosaurs whose mentality had not changed from the days when ITV was once described in the 1950s as a “license to print money".

The latest opportunity we as a nation may be about to fumble is called FreeSat. It's being billed as Freeview via satellite, but it is actually so much more than that. Freeview terrestrial TV is severely limited by cost and technical reality. There will never be more than 100 channels available, if that, and marginal coverage issues remain largely unresolved. In contrast, FreeSat delivery is 100% predictable and has the potential for 5,000 channels or more, each at about 4% of the cost of a Freeview channel. While we all hear about broadband delivery being the future of video, the available capacity is at least five years away from being able to provide an alternative to live HD satellite broadcast.

Smelling the coffee
The bad news – possibly catastrophic – is that FreeSat is a consortium lead by an unholy alliance against Sky's domination by the BBC and ITV, which have been buoyed by Freeview's accidental success. Furthermore, FreeSat's coverage could easily spill over to Europe and beyond.

Sky has proved that the major differential element that people are willing to pay for is live event broadcasting. The Brits and Europeans have a different perspective on ‘live’ to the USA: we live in two time zones that for practical purposes can be treated as one, yet the Americans cannot, and thus, combined with the confusion of cable, they will be late into the game.

"But where on earth do you find content to fill 5,000 channels?" you may ask.

Well, take a look inside those vast echoing TV studios presently known as Excel, Olympia, the NEC and their fast growing regional stablemates in Telford, Manchester, etc.

Is that coffee you can smell?

William Poel is EVENTS:review’s technology editor

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