The WIR: Channel 4 Privatisation Plans Set to be Shelved, RTL Revenues Up 18 Percent Despite TV Ad Struggles, and Job Cuts and Ad Campaign Pauses Hit Twitter

Tim Cross 04 November, 2022 

In this week’s Week in Review: Rishi Sunak reportedly wants to shelve plans to sell off Channel 4, RTL’ subscription strategy helps weather TV ad market slowdown, and all change at Twitter in Musk’s first full week in charge.

Top Stories

Channel 4 Sale Plans Set to be Scrapped
Previously announced plans for publicly owned UK broadcaster Channel 4 are set to be scrapped by new Prime Minister Rishi Sunak, according to a report from the Financial Times.

Boris Johnson’s government, which initially announced the sale, said privatising Channel 4 would enable it to compete more efficiently with international streaming giant. Many across the industry, not least Channel 4 CEO Alex Mahon, argued that privatisation would do more harm than good, while also compromising Channel 4’s ability to fulfil its remit as a public service broadcaster.

But Channel 4’s privatisation has always appeared to be a passion project for a particular set of Conservative MPs, rather than a priority across the party. And Rishi Sunak is privately sceptical about the benefits of privatising the broadcaster, according to the Financial Times.

RTL Revenues Up 18 Percent Despite TV Advertising Dip
European broadcaster RTL posted 18.9 percent growth in group revenue in its Q3 earnings this week, despite a drop in TV advertising revenues, with organic growth across the quarter of ten percent.

Strong performances from its production unit Fremantle and from its subscription streaming services RTL+ and Videoland drove this growth. RTL has put a big focus on growing its paid subscriber base over the past year, and now has over 4.8 million subscribers across its services. This puts it almost half way towards its target of 10 million subscribers by 2025. There’s work to do in monetising these subscribers though. RTL is targeting €1 billion in streaming revenues in 2025; revenues for the first nine months of 2022 have reached €195 million.

TV advertising revenues meanwhile were down to €614 million in the third quarter, compared to €686 million in the same period last year.

Musk Proposes Charging for Twitter, Begins Staff Cuts
Elon Musk has proposed a paid subscription service for Twitter. Premium accounts would be verified, their posts boosted and the amount of adverts they see reduced. In a bizarre Twitter exchange with horror writer Stephen King, Musk reduced the initial fee from $19.99 to $8 per month after the author expressed his disapproval. “Twitter cannot rely entirely on advertisers,” Musk tweeted, following calls to pause advertising on the platform by agencies IPG and Havas, as well as ad suspensions from brands including General Motors, General Mills and Audi of America. 

Musk is also expected to begin cutting up to 50 percent of Twitter staff from today, having immediately fired several top Twitter executives after taking control of the company. Civil rights advocates have warned the cuts could also impact the US midterm elections, potentially stripping the social media firm of resources designed to limit misinformation on the platform. Days into his new role, Musk appeared to tweet and then delete a conspiracy theory about the attack on House Speaker Nancy Pelosi’s husband.

The Week in Tech

Zefr Brings Brand Safety Product to YouTube
Zefr has announced its brand safety and suitability reporting product (BSRP) is available on YouTube in North America. Adhering to the Global Alliance of Responsible Media (GARM) framework, the BSRP provides advertisers with brand safety measurement across YouTube in-stream ad campaigns. The product comes in addition to Zefr’s YouTube Measurement Programme (YTMP) relationship, which covers brand suitability and contextual targeting.

Google Agencies Chief Mark Howe Announces Retirement
Google’s agencies director Mark Howe is to step down at the end of the year, marking the sales chief’s “semi-retirement” after 41 years in the industry. As well as 17 years at Google, Howe spent 20 years in TV sales and served on the Boards of IAB UK, IAB Europe, ASBOF, EASA, AA’s Front Foot, MMA Europe, The AA Council and NABS.

Netflix Acquires Sixth Gaming Studio, Spry Fox
Netflix has acquired gaming studio Spry Fox, creator of Triple Town, Alphabear and Cozy Grove. The acquisition brings Netflix’s total number of in-house games studios to six as the streaming giant builds out its gaming division. Netflix currently has 35 available games, with a further 55 in development.

Brands Expect CTV Advertising to Overtake Mobile
98 percent of businesses think CTV advertising will be bigger than mobile advertising, AppsFlyer has found. According to the brands surveyed, the best reasons to advertise on CTV include engaging with new audiences (73 percent), increasing engagement levels (73 percent) and driving higher lifetime value (50 percent). The report also showed that 86 percent of consumers are willing to see ads on CTV (especially if they are relevant to them), while 40 percent have downloaded mobile apps after watching a CTV ad.

Roku Beats Expectations for Q3, Warns of Weak Q4
Roku surpassed its expected revenues for Q3, growing 12 percent year-on-year to reach $761 million. But the OTT device manufacturer warned investors of a weak Q4 with a 7.5 percent decline YoY. “As we enter the holiday season, we expect the macro environment to further pressure consumer discretionary spend and degrade advertising budgets, especially in the TV scatter market,” the company said. Roku shares dropped nearly 19 percent as a result.

Innovid and NCS Partner on CPG Campaign Optimisation
Innovid and NCSolutions (NCS) formed a partnership to help CPGs optimise ad campaign sales. The pairing leverages Innovid’s personalisation tech and NCS’ purchase insights, according to the companies. “Historically, CPG brands have had to wait until a campaign is over to understand the sales impact for their creative executions,” said NCS CRO Dan Malmed. “Working with Innovid, advertisers can use real-time NCS purchase-based insights and optimise their creative at the most granular levels while the campaign is still in-flight.”

Snap Scores Sky Sports Content
Snap has renewed its deal with Sky Sports to host short-form video on Snapchat Discover in the UK. The content will include Premier League and Women’s Super League highlights, alongside Soccer AM and Monday Night Football clips. “We are delighted to continue our partnership with Snapchat to reach a highly engaged Gen Z community who talk about and watch sports and football on Snapchat every day,” said Jamie Hunt, Head of Digital & Social at Sky Sports.

OpenX and Permutive Team Up for Cookieless Activations
OpenX has partnered with Permutive to allow US advertisers to safely reach global audiences in a cookieless environment. The activation is enabled through OpenX Deal IDs, with audience targeting based on privacy-protected, first-party publisher data. “Our partnership with OpenX is a powerful example of ad tech working together to empower advertisers and publishers to harness the full potential of first-party data while creating a more transparent and responsible web,” said Permutive co-founder and CEO Joe Root.

The Week in TV

MediaForEurope Raises Stake in ProSiebenSat.1
MediaForEurope (MFE) has raised its voting stake in ProSiebenSat.1 to 29.9 percent, just shy of the 30 percent threshold that would trigger a mandatory buyout offer. Days earlier, Berenberg analysts predicted the German broadcaster would reappraise MFE’s merger proposals, following the departure of CEO Rainer Beaujean and lowered full-year guidance for the commercial broadcaster. “With a new CEO, and weakened profitability, the prospect of synergies in advertising and streaming technology may be more tempting,” said the analysts.

Viaplay Arrives in UK, Investigated in Poland
Viaplay landed in the UK on Tuesday, bringing more than 1,000 hours of Nordic content to the market. A more expensive Total package also includes live sports. Also this week, Poland’s Office of Competition and Consumer Protection (UOKiK) opened an investigation into Viaplay after sports fans complained of service interruptions and problems with sound and image clipping. The probe could result in the company being fined up to 10 percent of its turnover.

Disney+ to Start Selling Merch
Disney is launching a pilot program to sell merchandise through the Disney+ app, the Wall Street Journal reported on Tuesday. Subscribers can scan a QR code on the Disney+ menu to purchase Marvel and Star Wars products. The trial is seen as a move to combine the company’s media, entertainment and distribution segment with its parks, experiences and products division.

Paramount Misses Q3 Expectations
Paramount Global filed mixed results for Q3 2022. While Paramount+ added 4.6 million subscribers, ad revenues for its TV networks fell by 3 percent as macroeconomic headwinds hit the advertising market. The company noted strong performance for Pluto TV, which reached 72 million monthly active users and grew total viewing hours by double digits. Overall revenues were up 5 percent but missed expectations, leading to a 12 percent drop in share prices.

Netflix Launches with Ads in the US
Netflix with ads arrived in the US on Friday at a $7 monthly price point. The service is still in talks with Disney, NBCUniversal, Sony Pictures Television, Warner Bros. Discovery and Lionsgate to bring missing content to the cheaper tier. Meanwhile in the UK, BARB has started reporting Netflix viewing figures, extending its weekly top-50 lists to incorporate SVOD services.

Comcast Could Sell Sky Deutschland
Comcast is considering selling Sky Deutschland, Bloomberg has reported, following the parent company’s Q3 results revealing low sales in Germany and Italy. Anonymous sources suggest Sky Deutschland could be valued around €1 billion. “Sky Deutschland is subscale compared to its UK sister,” said François Godard, Senior Media and Telecoms Analyst at Enders Analysis. “Maybe a German buyer could merge it with something else and get to scale.”

Warner Bros. Discovery Brings Forward Streaming Plans as Revenues Fall
Warner Bros. Discovery (WBD) could merge HBO Max and Discovery+ in Spring 2023, earlier than its original time frame of next summer. Though the company added 2.8 million subscribers in Q3, overall revenues were down 11 percent year-on-year. CEO David Zaslav warned of further cost-cutting measures, raising WBD’s cost-saving targets from $3 billion to $3.5 billion.

The Week for Publishers

The Week For Agencies

Advertisers Pause Spend on Twitter
A number of advertisers and agencies have paused advertising on Twitter this week, due to concerns over an increase in hate speech and misinformation on the platform following the takeover of self-described free speech absolutist Elon Musk. IPG Mediabrands and Havas Media Group are both reported to have advised clients to pause spend on Twitter

Dentsu Set to Incorporate Carbon Emissions in Media Planning Tools
Dentsu announced this week that it will begin incorporating carbon emissions in its proprietary CCS Planner tool from early next year. Dentsu says this will allow brands to set clear carbon targets for campaigns and model alternative scenarios for optimal impact, reach and carbon levels, before any third-party investment is made, or resources committed.

Sorrell Suggests Tech Companies’ Ad Struggles are Overblown
Sir Martin Sorrell, executive chairman of S4 Capital, suggested in an interview with Bloomberg this week that perceptions of a massive downturn in tech companies’ ad revenues are overblown. Sorrell said that Meta specifically has seen significant problems, but other major platforms Google and Amazon have seen relatively healthy results.

M&C Saatchi Takeover Saga Ends with No Deal
M&C Saatchi looks set to remain independent as its protracted takeover saga wound down this week. Shareholders voted against Next 15’s proposed takeover offer, weeks after a rival offer from AdvancedAdvT failed to win shareholder support. Next 15 has now terminated its bid, suggesting it won’t continue pursuing the deal.

Stagwell Lowers Full Year Forecast
Agency holding company Stagwell has lowered its full year growth forecast, projecting full year pro forma organic net revenue growth of 16-20 percent. Stagwell said its seen less political spend than might have been expected, due to fewer closely contested races in the upcoming US midterm elections, while inflation and the impact of hurricanes in large markets have also taken a toll.

Adobe Puts Global Media Account Under Review
Adobe is reviewing its global media account, according to AdAge, putting current holder Wavemaker on notice. Stagwell and Dentsu are also competing for the account, according to AdAge.

CMA Introduces New Ad Transparency Guidelines
The UK’s Competition and Markets Authority (CMA), has announced a new set of principles and guidelines which it expects social platforms to adhere to, in order to provide more transparency around sponsored posts. Influencers have also been told that they must disclose when they have been given gifts in return for social mentions, and brands have been told they share responsibility for compliance.

Hires of the Week

PHD Names Toby Hack as EMEA Chief Executive
PHD has announced Toby Hack as its first chief executive for the EMEA region. Hack was previously CEO of global business for PHD, and has been with the agency for nearly 12 years.

Jay Prasad Joins Relo Metrics as CEO
Jay Prasad has joined Relo Metrics, a sports sponsorship intelligence platform, as its new CEO. Prasad joins from LiveRamp, where he headed up strategy for TV and measurement.

Digitas UK Hires Sarah Hackett as Chief Growth Officer
Digital UK has picked Sarah Hackett as its first chief growth officer, where she will lead the agency’s growth strategy. Hackett joins from experience consultancy Zone.

This Week on VideoWeek

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“Good Ad Experience Starts with Accessibility”, watch on VideoWeek

Brands Are Using OEM Data to Navigate Audience Fragmentation, Says LG’s Ed Wale, watch on VideoWeek

YouTube Positions Itself as a CTV Gateway with Primetime Channels, read on VideoWeek

How Hulu Nailed CTV From the Start, watch on VideoWeek

Viewers Are Settling Into the AVOD Trade-Off, watch on VideoWeek

Tubi Surpasses Fox Entertainment on Ad Revenues, read on VideoWeek

Channel 4 Drops All 4 Brand in Unification of Digital and Linear, read on VideoWeek

Here’s Where the Big Four Agency Groups Found Growth in Q3, read on VideoWeek

Ad of the Week

Zulu Alpha Kilo, Left-Handed Mango Chutney

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About the Author:

Tim Cross is Assistant Editor at VideoWeek.
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