Media Analysis: 500 movies, one living room

The channels will each relate to specific film genres, including Comedy,
Drama, Indie, Sci-fi & Horror, Action/Thriller and Family. Sky claims it
will air 20 premieres a month as part of its pledge to broadcast 450
different films each week.

With Film4 carving out a valuable niche on Freeview and both ITV and
Five mulling the creation of their own film channels, the market has
never been more competitive. But with such an abundance of choice, film
channels run the risk of losing their distinctive appeal.

Until recently, terrestrial TV premieres were huge events, with first
showings of family-friendly hits at the core of the Christmas schedule.
In the digital age, most industry experts agree that the term premiere
is largely becoming pointless.

While a hit film such as Bridget Jones's Diary could draw an audience of
6m on its first showing on Channel 4 in November 2004, and even managed
3.4m for a repeat on the same channel this February, there is a danger
that smaller films can get lost in the clutter - Mike Leigh's critically
acclaimed and Oscar-nominated film Vera Drake, for example, pulled in
only 3m viewers on its C4 airing in February.

Viewing options

While the spread of high-definition TVs and home-cinema systems means
consumers are watching more films at home, it is not only the number of
channels and video-on-demand services that are piling pressure on
broadcasters - online DVD rental firms have also taken off, with the
ever-shrinking window between debut theatrical and DVD releases further
limiting the appeal of TV premieres.

Simon Calver, chief executive of online DVD rental company Lovefilm
International, is confident that the market can accommodate this
proliferation of sources, but is most certain that the lure of DVDs is
not as threatened by the broadcasters' services as the latter might
hope. 'We don't see more film channels as a threat,' he says. 'With the
launch of high-definition DVDs around the corner and digital downloading
growing, the market is booming.'

Christian James, co-founder of the IF Agency, whose clients include
Odeon Cinemas, is sceptical about the potential of on-demand films.
'Virgin Media may say it is offering 500 films on demand - it's a great
headline, but the average consumer would only want to watch 10% of
those,' he argues. 'Film channels sell disappointment as you feel you
are paying for a back catalogue.'

Yet, while it is true that many people have unwatched DVDs languishing
on their shelves, if the same film is run on TV, they may well choose to
watch it simply because they need take no more action than turning on
their set.

'New technology has provided a new level of convenience,' argues Cameron
Saunders, head of marketing of digital channels at Channel 4. 'When you
give consumers too much choice, they simply choose not to watch at all,
but this is where the brand comes in.'

Saunders believes that the approach adopted by Film4 encourages
consumers to sample new films, as they trust the channel's editorial
integrity. Jeff Ford, the channel's director of acquisitions,
acknowledges that Film4 is in a 'slightly unique' position. 'The channel
is about reputation as well as ratings,' he says. 'We put
foreign-language films in peaktime slots and, while we have bought big
films such as Crash, we also invest in smaller titles.'

Brand context

Neil Christie, managing director of Wieden & Kennedy, says that Film4
has a halo effect on the films it shows. 'If Film4 put on a film such as
Madonna's Body of Evidence, it would be seen as a retrospective of her
career as a film actress, but if you put in on Five it would just be
thought of as soft porn.' Ultimately, while Channel 4 still gets
significant uplift from premiering films such as Collateral, Film4 is
not dependent on premieres to bring in audiences.

There are clear benefits to the Film4 halo: it is the UK's most-watched
film channel, the 11th most-watched digital channel and one of the top
10 channels most watched by 16- to 34-year-olds and ABC1s. ITV, which is
rumoured to be planning the launch of ITV Movies this summer, and Five,
which is considering a similar service, clearly want a piece of this
desirable audience.

Despite the intense competition, Starcom group trading director Chris
Locke believes the market for films on TV is far from saturated. 'Film
is a great product and remains a powerful part of the schedule,' he
says. 'While premieres are less impactful than they were, repeats aren't
necessarily a bad thing - we buy around film genres. If ITV does a Bond
season, 5m-6m people watch it.'

Further testament to the popularity of film is the ongoing growth in
cinema admissions, which do not appear to have been dented by the
burgeoning number of film channels and on-demand services. Carlton
Screen Advertising is forecasting that admissions for the first quarter
of 2007 will be up at least 5% on the 37m for the same period last
year.

While TV premieres cannot guarantee the same cut-through as they did
even 10 years ago, there remains a clear consumer appetite for films.
With an increasing number of channels and on-demand services, the
challenge for broadcasters is to prove they are doing more than buying
films by the yard.