Lessons from European TV: always consider consumers

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The brief for this column is predominantly the glib "rest of the world"-and occasionally the ornery subject of "creativity."

Just now, the trouble with the rest of the world is that every time I put finger to keyboard I am Cassandra, prophetess of doom. It is especially so in Europe, where a series of disparate recent stories add up to nothing less than a crisis for the leading European broadcasters. And this crisis may represent a serious long-term headache for some of the world's leading media conglomerates.

The roll call of shame so far: In Germany, the once all-powerful Kirch Group teeters on the brink of insolvency. The astonishing $4.1 billion-plus debt of its pay-per-view digital arm, Premiere TV, overwhelms it. The debacle may bring down one of Germany's leading banks. What's more, the potential "white knight" rescuers represent a choice that lies between the devil and the deep blue sea: Rupert Murdoch or Silvio Berlusconi.

In France, the Vivendi Universal CEO and onetime master of the universe, Jean-Marie Messier, fired the founder and CEO of his loss-making Canal Plus pay-per-view TV arm. This led to on-screen protests by technicians and actors and mass demonstrations in the streets. The affair threatens the French movie industry and became an issue in the recent French presidential election. It almost brought Mr. Messier down. It still may.

Then there is ITV Digital, the joint venture of Carlton Communications and Granada, the U.K.'s leading commercial broadcasters. It has collapsed, costing thousands of jobs, including that of ITV CEO Stuart Prebble. Its demise clouds the future of many decades-old U.K. soccer clubs, which depend on the income from ITV Digital's broadcast TV rights.

In Spain last month, there was the demise of the much-hyped Quiero digital network-less than three years after a consortium paid $300 million for its license. It was yet another pay-per-view digital channel that overpaid for rights and failed to produce the subscriber numbers promised in the business plan.

That's four of Europe's five leading TV markets in crisis. The fifth, Italy, has its own nightmare because Mr. Berlusconi has inordinate control over not only his commercial stations but, now, the ailing Italian state TV monolith, RAI, too.

Analyze and draw a conclusion in 550 words? Don't take the consumer for granted. You have a whiz-bang new technology on which you have bet the company, and you may have politicians on your side through lobbying. But do not assume the consumer is a lemming.

The broadcasters attempted to deprive the consumer of choice by buying the rights to the one thing that history (i.e., Rupert Murdoch and the success of Sky) has suggested can establish a new channel: that is live sports and, in particular, live soccer. Instead, consumers did not play ball. They decided that, much as they want live soccer, they do not value it enough to go from seeing it for free to paying the outrageous fees being asked by the greedy broadcasters.

The moral? Do not take the consumer for granted. Next column: Is post-production wizardry making creatives lazy?

Stefano Hatfield is editorial director of Ad Age Global and Creativity.

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