A touch of celebrity sparkle on squeezed TV budgets

It's that time of year where advertising creatives put their big budgets to the test, while ignoring much of the product. It's about stories, sentiment and celebrity.

Waitrose signed up Graham Norton in an extremely high-calorie TV spot, while Michael Buble added star fizz for Asda. For Marks and Spencer, Sophie Ellis-Bextor and Hannah Waddington torched and trashed the Christmas trimmings they don't like.

At John Lewis, having just switched advertising agency and despite profound problems at the retailer, harsh reality was suspended as it launched its two-minute extravaganza, featuring... a rogue venus flytrap!?

Opinion is mixed, we're told. That's probably the intention... to get people talking.

The irony is that advertisers are hauling back their conventional media spend. Like election campaigning with poster launches, or ad breaks during the US Superbowl, it can be enough to launch the advert to the the media so that it gets noticed and discussed, without having to spend on making it widely available.

That harsh spending environment was behind a tough message to staff at Reach, the biggest publisher of printed news in Britain, which includes the Mirror and Express titles. In Scotland, it has the Daily Record and Sunday Mail, and 17 local papers among its 170 British brands.

The old paper business, though in long term decline, has recently been holding up better than the more fickle digital advertising market, in which the global tech giants including Google and Facebook are gobbling up ad revenue like rogue venus flytraps.

After years of cutting costs and journalist jobs, including more than 400 going earlier this year, Reach is reaching for the axe again, with 450 more to go, mostly in news teams. That's out of 4,000 staff. The chief executive is talking of difficult and radical change to how journalists work.

In the television world, Glasgow-based STV wasn't in the Christmas spirit for the John Lewis launch party. On the same day, it was announcing a big fall in national TV advertising in the festive quarter.

The third quarter held up better because its partner ITV had bought the rights to the men's Rugby World Cup. The fourth quarter was always going to struggle in comparison with last year's FIFA men's World Cup, but widespread economic uncertainty is eating into advertiser confidence.

STV has invested in getting more local firms to try TV advertising, and the positive response has provided some protection from the fickle ad budgets of the big national brands. It has seen a sharp decline in revenue from the Scottish government budget for Covid health messaging.

The commercial broadcaster has also insulated itself from the chill winds of mainstream broadcasting by becoming an ever-bigger maker of programmes for others to put on air, including the BBC.

It's been acquiring smaller production companies and this year boasts "a record 70 series while securing around 50 new commissions and recommissions, despite the global commissioning market also being impacted by the economic slowdown".

With the purchase of Greenbird Media, the programme-making "studios" division will see revenue nearly treble this year to £65-70m, against a target of £40m, but with profit margins squeezed.

At its much bigger partner on the channel three slot, ITV preceded STV's results with concerns about its programme-making division taking a knock as free-to-air broadcasters, also including Channel 4 and Channel 5, pull back on commissions.

The big money has been going into the continuing battle for subscriber cash at the big streaming services, such as Netflix and Disney+. Netflix showed its strength this week, with more subscribers, partly due to its squeeze on sharing passwords, and an increase in monthly rates.

Watch out for the final series of The Crown by Netflix, about the second Elizabethan age, in two tranches on 16 November and 14 December, devouring audience attention. ITV and STV struggle to compete at that level of programme-making, and the BBC is far short of the Netflix drama budget.

The wider production industry has been hit by US writer and actor strikes - newly resolved - which paused a lot of work in British studios. It has carried a heavy price for freelance technical staff.

Far better news for STV and ITV was the inclusion in UK government legislative plans to protect their position as the third channel on the Electronic Programme Guide - the list commonly used to select channels.

The law is intended to ensure that such public service channel choices, with BBC1 and BBC2 ahead of channel three, maintain their prominence and have a secured place on newer technology platforms.

While they are losing audience share in the fracturing marketplace, government is offering them some valuable protection while telling streaming newcomers they will have to play by the same regulatory rulebook.

There appears to be a price. Those getting protection are being told to focus more on what makes public service broadcasting distinct, which may mean less of the low-brow and crassly commercial.

Channel 4 has not been allowed to do what ITV and STV have done. Since being set up in the 1980s, it has had to buy in content. That will change under the proposed law, allowing Channel 4 also to make its own in-house productions, and that ought to mean the ability to sell those programmes and license those formats.

But the prospect of privatising it, which the Conservative government recently wanted to do, appears to have been switched off.

The law is to ensure prominence for Gaelic and BBC Alba in channel choice and to include Gaelic, Irish, Ulster-Scots, Welsh and Cornish as minority languages getting special attention by public service broadcasters.

For commercial radio as well, there are to be protections to ensure they get access to newer platforms such as smart speakers, but at a price of sustaining local news. That has been under pressure as music stations have gone national and lost much of their local identity.