‘Combining TV and publishing – a big decision that worked’

Thursday, July 23, 2009 | Posted by: Fiona Cullinan
Categories: Media sector | Tags: Alex Connock, business contract publishing, Newton TV, video-rich online magazine, customer publishing, dbda, trade media, Teachers TV, diary, Ten Alps, multiplatform contract publishing, TV production company, Business Today, online publishing, Bob Geldof, entrepreneurs , Kent TV , Link2, Digital Britain , Entrepreneur’s Diary

It’s the halfway point in our Entrepreneur’s Diary series, which follows two leading CEOs behind the scenes of their work. Inspired by Grant Thornton’s My Big Decision podcasts, we’re asking them what has been the biggest decision of their career so far.

Alex Connock, CEO, Ten Alps : I’ve made a lot of big decisions, though perhaps not the same number of great ones…

Getting the timings incompetently wrong as producer of The Word TV show so that Nirvana’s first UK TV performance of Smells Like Teen Spirit was cut off after 10 seconds? Perhaps not.

Telling TV producer/genius Charlie Parsons in 1997 that there was no future in a TV idea based on Lord of the Flies because it was just too nasty – he then went on create Survivor which was the no.1-rated US TV show for an entire decade. Hmmm.

But how about this? Buying, largely for debt, a company as big as we were, in a sector that everyone else thought was completely different from our own – so as to be in prime position to exploit the revolution we believed was going to come. 

That’s what we did three years ago. And happily – this decision actually worked. 

Today we have tremendous and unique opportunities to drive Ten Alps forwards, even with the media in recession – precisely because of the big strategic risk we embraced three years ago. I celebrate that we did it – but it definitely wasn’t easy.

Rewind to 2006

March 2006. A boom time in the media. TV production companies are being sold for 12-14 times forward EBIT (Earnings Before Interest and Tax), with earnouts barely stretching to three years, by groups whose financing knows few bounds. We can’t keep pace with that, and we’re not even sure we’d want to.

TV production customers – the BBC, Channel 4, ITV – have, under government pressure, ceded rights to indies like us, which strengthens our business model.  But in UK TV alone, there are still only three really big UK customers (BBC, ITV C4) and three smaller ones (Discovery, Five, BSKYB), which is a suicidal concentration of business risk.

The vision from the mountaintop

Meanwhile our biggest contract is a £50m project for the government called Teachers TV – ostensibly a TV production job, but really so online and so focused on a single customer niche that it’s best described as multiplatform contract publishing.

And that’s the big insight. Our plan is to take our skills but narrow customer base in TV, and combine them with a wider customer publishing company which has access to the entire economy and thousands of clients, to produce the kind of multiplatform media which will appeal to specialist users in every imaginable sector, from North Sea divers to nuclear power station owners, from print to online to mobile TV.

Our view in 2006 was that media wouldn’t be segmented by platform any more – online, print, TV – but by customer, client and niche, all of whom would want to be on every platform. Today that seems old hat. In 2006 one top media analyst said we were ‘barmy’.

Let’s get cracking

So, the risk we took was to make the strategic move and buy a big contract publishing business – the market-leading, £26m-turnover, 250-staffed McMillan Scott, started by one great entrepreneur (Martin McMillan) and run by another (Adrian Dunleavy.) We signed up to a deal for between £9m-£12m, funded it mostly with debt, and prepared for the criticism – which we handsomely received.

Many in the Soho House TV ‘opinionerati’ (of which I am one) sniffed that we had made a fatal error, diverting from the rock-solid, core-industry tactic of selling formats to Channel 4 or ABC, to go into the (perceived) low-rent world of trade media.

Many in trade media questioned what relevance TV and online TV could possibly ever have to an industry whose main players (UBM, Informa, EMAP) had proved that print, events and online subscription were the only ways to play to a niche business audience.

Fast forward to 2009
Three years later – and where are we now?

We’re a lot further on. We haven’t just backed our strategy – we have pursued it, buying five more companies in the trade media space and we are now Britain’s second biggest business contract publisher (Marketing magazine survey 2009) . Our turnover trebled to £80m and we grew our profits in 2008-9, against the backdrop of a recession that has slaughtered the media sector.

On the ground, we won the second, five-year £60m Teachers TV contract with a much more online and multiplatform focus to the proposition, against major opposition.

We went heavily into exciting crossover fields where video meets niche print and online – from Kent TV to our new Link2 portal (aggregating some 400 trade titles), to our video-rich online magazine Business Today.

We’ve gone into business video production on a serious scale. We’ve had great success in niche fields that defy all description with the old, sector-specific definitions – for example, dbda (see earlier post).

Above all, we are now an owner/producer of content, and a company with the commercial clout (300+ advertising sales people, 600 titles, 60,000 paying customers) to create media without asking permission from anyone else. We’re no longer a supplier with the begging bowl out: we can launch projects on our own. So we’re working on a new generation of projects for next year – a science channel called Newton TV with the Open University and Science Museum, an accountancy training channel called Accy TV… and a sequence of bids for local public sector news licences under Digital Britain, where part of our funding model will be commercial.

Put simply – as a media company, we’ve come of age, and it is all due to that big decision.

Meanwhile some of the models driving the rollups of pure TV production are looking shaky – as broadcasters rein in their spend on indie production and claw back rights. And a business publisher without strong video production skills today is starting to feel as relevant as a newspaper without a website.

What have I learned?
The key thing I’ve learned is that a strategy must lead, not be dictated by the audience, be that industry peers or investors. And if there is another big, risky decision to take on our next big deal – we’re absolutely looking for one – we’ll take that one, too.

You can catch up on Alex’s previous posts from our Entrepreneur’s Diary series, in which we follow a male and a female CEO to discover what life is like behind the scenes of their business.

To find out what CEO Ros Simmons’ big decision was, click here