Hanging On The Telephone
As broadcasters struggle to recover from the flurry of participation TV and phone-in competition blunders, NewsLine examines the story so far, and questions whether winning back viewers’ trust is really on the cards…
Britain’s broadcasters are currently facing one of the toughest times in decades, with fragmentation and new media formats luring viewers and advertisers away from traditional platforms.
But one much publicised scandal could potentially be the most harmful threat these guys have ever faced. The recent spate of problems with premium rate phone-in and participation TV shows has seen viewer confidence plummet to an all time low, and if these services are eventually canned, these essential revenue streams could dry up completely.
Shaun Woodward, the broadcast minister, recently said that the government would consider implementing a total ban on premium rate phone-ins if broadcasters do not clean up their act.
This follows a glut of stories suggesting broadcasters were being less than transparent about their television phone-in programmes. The programmes under the spotlight span across the main broadcasters, with the likes of the BBC’s Saturday Kitchen, Channel 4’s Richard and Judy, ITV Play and Five’s Quiz Call amongst those implicated in the scandal.
Most recently, Channel 4 attempted to right its wrongs with a £50,000 payment to Great Ormond Street Hospital following the scandal which erupted over the Richard and Judy ‘You Say We Pay’ quiz.
The ‘You Say We Pay’ quiz was axed in February following claims that people who rang in attempting to win a prize had no chance of being selected.
ITV Play was also axed to be replaced by a time-shifted channel after an internal review of the broadcaster’s interactive services, whilst Saturday Kitchen is now broadcast live after the Corporation admitted that viewers were asked to phone in for a show they had no chance of appearing on.
Most notably, GMTV’s presenters were forced to read out a statement saying the broadcaster had no idea of apparent irregularities by its phone line provider, Opera Interactive Technology, after BBC’s Panorama claimed tens of thousands of calls and texts had no chance of winning.
The allegations that were broadcast on the current affairs programme alleged that Opera finalised shortlists of potential winners “long before” the phone lines closed, and once they had been picked, subsequent callers had no chance of winning.
The BBC investigation said the amount of money people spent trying to enter the competitions was an estimated £45,000 a day, or £10 million a year.
In April, premium rate phone line regulator Icstis announced the introduction of new rules for television quiz shows. These insist on better pricing information and greater transparency about how likely calls are to get through.
The watchdog said the new rules would “boost consumer trust and confidence” in quiz TV services and would give viewers a better understanding of their chances of getting through to programmes, as well as clearer information about the cost of calls.
The new rules will force broadcasters to show a prominent and permanently visible standalone display showing the total number of calls entered to the service in the preceding 15-minute period. This will then have to be updated every 10 minutes.
Pricing information will also have to be clarified by a presenter or by means of voiceover at intervals of no more than 10 minutes, while all callers will be warned about the cost of calls for every £10 they spend in any given day.
A recent study has revealed that the reputations of commercial broadcasters have been severely damaged by the recent scandals, with GMTV the hardest hit.
75% of respondents to a poll said they trust it less since it became embroiled in irregularities over its phone-in competitions. The survey of a 1,000 people was commissioned by marketing website Utalkmarketing.com and carried out by OMD Snapshots.
ITV and Channel 4 are also badly affected, according to the research. 69% and 65% said their trust has been undermined by problems that have either seen viewers encouraged to enter competitions when the lines have closed, or overcharged for participation in popular strands and shows such as The X Factor, Richard and Judy, and Vernon Kaye’s Gameshow, Marathon.
However, in GMTV’s case the research showed that despite viewers trusting brands less, only 12% of respondents said this would actually make them watch less.
Recently, communications watchdog Ofcom announced that it has opened in excess of 20 investigations into irregularities on premium rate phone-ins and interactive services, with chief executive Ed Richards claiming the debacle is not the result of poor regulation but a “systemic failure of compliance”.
The TV Quiz sector earns the television industry big bucks. According to Ofcom, approximately 30,000 services are in operation at any one time – generating estimated revenue of around £1.6 billion in 2005. Precise industry data on call TV quiz shows is difficult to source accurately, but various industry commentators and researchers have suggested that it may be between £120 million and £160 million per annum.
While neither regulator has available comprehensive data in this area, Ofcom figures show TV industry revenue from all “interactive services” (not only call TV quiz shows) at £104 million for 2005. More specifically, ITV plc’s interim results for the first half of 2006 disclose a profit for ITV Play of £9 million against revenue of £27 million, after four months of trading.
Ofcom and Icstis have said they recognise that broadcasters’ traditional revenue streams are under pressure and broadcast advertising income is and will continue decreasing.
The regulators say that they therefore understand the need for broadcasters to explore new revenue streams, and that the implementation of supplementary and/or alternative funding models will continue to be essential for broadcasters as digital technology advances further.
Not only will the market become increasingly competitive, but audience expectations are likely to change dramatically as their method of consumption develops in the evolving convergent multimedia landscape.
Both regulators therefore believe the main emphasis of broadcast regulation is likely to continue shifting towards consumer protection, as viewer interactivity and participation increases.
The pair are actively looking at whether further rules should be introduced to add to those already outlined. These have been labelled by some as strict, but in some respects it makes logical sense. What is puzzling is the fact that these guidelines were not already in place, and that people phoned in without knowing the likelihood of getting through, particularly considering the huge cost of the calls.
Did viewers really put such trust in these quiz programmes, were they really that naive? And what will be the broadcasters’ next money making endeavour, and will they ever win the public’s trust back for such formats?
Channel 4 chief executive Andy Duncan has said that phone-in services are not a critical part of Channel 4’s revenue generation and that the broadcaster sees this “as an area that will diminish in importance for us.”
“We’re not planning to scrap them completely – where voting is an important part of the editorial idea of a programme that can influence what’s going on, appropriate voting will remain,” he said. “And where we think a competition generally enhances the viewers’ experience, as in Deal or No Deal.”
C4’s recent annual results revealed that new media had generated a turnover of £50.4 million and a profit of £13.5 million, but reports have suggested that nearly all of the “new media” profit in the broadcaster’s annual report is from premium rate telephone calls to shows.
The most recent news has suggested that the controversy surrounding this form of participation TV has caused a big drop in the number of calls contests have received, according to service operator Eckoh.
Eckoh said the crisis had made a “significant impact” on response levels, which it described as “much lower” throughout the sector.
Unveiling its preliminary results for the year ending March 31, the company said the “adverse publicity” and the “potential increase in risk” meant the firm was now reviewing its involvement in the sector and would look to renegotiate its contracts with broadcasters to improve margins.
However, despite the negative publicity, Eckoh said its client interactive voice recognition (IVR) division actually increased its revenues by 50% to £71.3 million in the 12 months to the end of March. This could be mainly attributed to the launch of ITV Play in April 2006. Eckoh said profits in the division also rose 13% to £3.5 million.
Today, Optimistic Entertainment has gone into administration saying adverse media coverage of the participation TV sector as a whole together with regulatory investigations have significantly impacted on consumer confidence and audience participation for its shows.
Time will tell whether other companies will suffer a similar fate, but what is clear is that the embarrassment to the television industry in particular is immense, and revenue has already been affected. What remains to be seen is the full long-term impact.
As television viewing figures decline and ad revenue slides, what will happen without these money making streams, how will the regulators sort the issues out and what dramatic steps will broadcasters have to take to amend their soiled reputations?