RTL chief dismisses ITV rumors

Zeiler says he has not 'ruled out' bid for Blighty web

LONDON — Pan-European broadcaster RTL is not currently in talks about a possible takeover of ITV, RTL chief exec Gerhard Zeiler told a London conference Monday.

Following the news that U.K. cabler NTL has approached ITV about a merger, press reports have suggested that RTL, which owns rival U.K. web Five, might also throw its hat into the ring.

Speaking at the European Media Leaders Summit in London’s Landmark Hotel, Zeiler dismissed these reports as “pure speculation.” But he didn’t deny any interest in the deal: “I don’t rule anything out,” he said.

In his keynote address, Zeiler made a bullish case for Europe’s traditional free-to-air broadcasters in the digital world, arguing that their established brands give them a stronger position than new entrants to exploit the new opportunities.

“Brands rule,” he said. “Content is king, and that will be even more true in the digital world, but brand is the king’s boss.”

In that context, he was positive about the long-term prospects for ITV to emerge from its current slump. Asked if ITV is still an attractive company, he said, “Yes, and if they get it right, a very successful one.”

“Will that be a turnaround in two or three months? Definitely not. But to have a brand like ITV, and to be still by far the most successful commercial broadcaster in the U.K., why should they not have a future? If you say they don’t have a future, the whole free to air industry all over Europe doesn’t have a future.”

He admitted that RTL is in a weaker position in the U.K., where Five trails both ITV and Channel 4 in the com-mercial market, than in other Euro territories where its webs occupy first or second spot.

“In most we are number one or number two, but in two countries, the U.K. and Russia, we are the challenger of the challenger,” he said. “That shows how important those markets are for us.”

Laying out 10 principles for traditional webs to follow in the digital future, he said they should embrace fragmentation and new distribution platforms, exploiting new niches and developing new revenue streams beyond their traditional reliance on advertising.

He also counseled keeping a tight grip on costs, and urged webs to lobby more effectively, particularly in Brussels, for liberalization of ad rules.

Many of his arguments were seconded by panelists including ITV’s director of television Simon Shaps.

“Fragmentation is not the end of, or even a significant way of undermining, these free-to-air businesses,” Shaps said. “On the contrary, in a fragmenting market, where the average multichan-nel service in (the U.K.) has an average audience of 1,800 viewers in any hour, the scale, breadth, diversity and brand-building power of ITV is a significant and sustainable asset going forward.”

Shaps pointed out that in 2006 so far, ITV has launched 25 new shows that have won over five million view-ers. That, he quipped, is “about 24 more” than the web’s nearest commercial rival Channel 4.

Robin Paxton, managing director of Discovery Networks Europe, said, “We still see a lot of growth in both traditional linear broadcasting and pay TV.”

“We’re launching a new channel in Poland tomorrow, we still see growth in subscribers and growth in the pay tv universe going forward. We expect to grow our total revenues across Europe by certainly 20% in our core business over the next five years, and we see advertising revenue having an increasing rather than a diminishing share of that. Almost counter intuitively, we have launched an analog free to air broadcaster in Germany this year.”

He described Discovery as a “technologically agnostic multimedia company,” but cautioned that trad webs should not regard new platforms as just another way of distributing their existing content.

“Every new technology develops its own language and forms of consumption. If you see them as a passive platform that you are going to put your existing content on, that would be a mistake.”

The European Media Leaders Summit, organized by Informa Media and PricewaterhouseCoopers, runs Nov. 13-14.

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