Elisabeth Murdoch, the chairman of global TV producer Shine Group, has urged broadcasters to look to the success of video-on-demand sites such as YouTube in a bid to build relationships with viewers.
Delivering this year’s MacTaggart Lecture at the Edinburgh International Television festival, she warned that commercial broadcasters will become “increasingly marginalised” unless they can “figure out how to have a real one-to-one relationship” with their viewers.
Murdoch, the daughter of Rupert, whose News Corporation bought Shine Group last year, said that the “traditional eyeballs-based advertiser model is ultimately not sustainable”.
She said broadcasters should be looking to the success of internet sites such as YouTube, which make use of content made specifically to be viewed online and offer audiences a number of “channels”.
“New forms of content and new audience relationships are being created very rapidly outside our very linear old world,” she said.
In her speech, Murdoch, whose Shine Group owns production companies including Kudos Film and TV, warned that the video-on-demand sites such as YouTube have started to “build new networks”, offering viewers hundreds of channels.
She said YouTube had begun to “behave like a market leader” because of the way it commissions and promotes its own made-for-online content.
She urged broadcasters and producers not to think of YouTube as just a platform “based on homemade videos of cats in washing machines”, claiming that the site and others like it can now command up to 120 million subscribers.
She highlighted how comedian Ray William Johnson has his own channel on YouTube, and added that the internet site premieres “big new series by big new names”.
Murdoch also warned that talent are now using YouTube to create “direct-to-consumer relationships” and added that digital platforms can now “translate audience trust into transactional relationships incredibly efficiently and without the middle men, agents, media buyers or programme makers reliant on broadcast-based business models”.
She said that broadcasters and production companies “must all be creating direct-to-audience channels”.
“Let us not forget that we are compelled to connect with the audience through moving pictures and sound. Let’s not be entombed by what we once defined as a television screen. Just imagine if the record labels had remembered that their business was to connect people to music â€“ not simply to sell them CDs. Perhaps the industry wouldn’t have splintered in the way it has?” she said.
Murdoch also said that broadcasters and producers have got “the emphasis wrong between building a community and selling a commodity”. She said the “imperative to build community has massive implications to how we approach the television business”.
Murdoch said: “Commercial broadcasters must figure out how to have a real one-to-one relationship with each and every one of their viewers – if they don’t, they are destined to become increasingly marginalised and dependent on the occasional national live events [such as the Olympics].”
She added that broadcasters needed to “create services that are sufficiently valued to allow a more interactive and transactional relationship with the viewer”.
“And we need to do it soon. Slapping a hash tag in the corner of the screen doesn’t begin to build a community,” she said.
Murdoch also used her speech to encourage more collaboration between producers and broadcasters, as well as “advertisers and second-screen services”.
She praised the BBC as “understanding that our new world demands new eco-systems”.
“Under the vision and leadership of Mark Thompson, the BBC has been the market leader for building new relationships and services with creatives from every sector,” she said.
However, she said that she was “astounded” just how little social media “functionality” there is on public service broadcasters’ video-on-demand sites and websites.
“To my mind, this is exactly the real estate where producers and broadcasters, and the audience for that matter, have so much room for collaborative and mutually beneficial ventures together,” she said.
She said broadcasters should be “connecting producers with their advertisers for collaborative sponsorship or product placement initiatives”.
Earlier in her speech, Murdoch urged broadcasters and producers not to think of money as the “only effective measure of all things”.
“It’s us, human beings, who create the society we want, not profit,” she said, adding: “Profit must be our servant, not our master.”
In her speech, Murdoch also praised Sky for its increased investment in UK content.
“Sky and many multichannel operators are now contributing hundreds of millions of pounds, creating a renaissance for British scripted series,” she said.
Addressing the decision to allow Shine Group to be bought by News Corporation, she described News Corporation as a “content company”, which she said believed in “taking long-term investments in to creative risks”.
Referring to recent phone hacking scandals, she acknowledged that News Corporation has had to ask itself “very difficult questions about how some behaviours fell so far short of its own values”.
“Personally, I believe one of the biggest lessons of the past year has been the need for any organisation to discuss, affirm and institutionalise a rigorous set of values based on an explicit statement of purpose,” she said.