Name: MPW London 2019: A Conversation with ITV CEO Carolyn McCall
Uploaded: 2019-06-03
Duration: 12 min 55 s
Description: Carolyn McCall talks with Fortune CEO Alan Murray about ushering ITV into the streaming game.

Thank you for doing this. I'm sorry you got the short straw and have to deal with the guy on the stage but Why do I get the guy? [ LAUGH ] [ LAUGH ] So you were in media. You were top executive at the Guardian. So you suffered problems that we suffer. You escaped You went to turn around EasyJet and now you've come back. Why are you coming back to media now? Well look firstly I didn't feel like it wasn't about escape, I mean i think Guardian Media Group had a great, we had a good strategy. And the strategy was to divest all our businesses which was highly profitable, Australia being one, Emap, Radio. We just divested all of those businesses to. We knew the Guardian was going to need a lot of money and the core purpose of the group, it's owned by trust was to keep the Guardian going in perpetuity and so actually that was strategy's worked, and the Guardian's now kinda at a break even though they lose money. They're allowed to lose that money because that's exactly what the fund was created for. So it was an escape I just felt that I'd been there 20 24 years in total. Because I went all the way through and then I ended up running the group I thought I would have you know if I didn't leave. Then I would never have left. And Easy Jet was a great opportunity. And it wasn't exactly as if I was escaping because you don't go to an airline for an easy life. Yeah. No, it, that was no simple turnaround Yeah it was really not a simple thing and then actually, I'd done nearly eight years at EasyJet, and I felt that the value I'd added I was never gonna be able to add again. I'd done a huge, Yeah. Amount with a great team. And so when I thought actually I was gonna probably do something completely different. Must ba a PLC CEO, because once you've done the PLC, it's very intense, it's something is of out of your control, economical look etcetera, etcetera that it pressurize and it's very quarterly driven. Yeah Yeah [ UNKNOWN ] Actually I had done that. But then I TV came along, it was just very interesting. I think media is really fascinating. Well, that's why I ask the question about coming back to it. Because you live through. What Facebook and Google were doing to the print media and now you're coming back into television right at the moment that Amazon Netflix a consolidated Disney are jumping into that space What makes you think that I TV which is healthy company in the UK context but pretty small compared to those guys yeah Can survive and thrive in the land of the Giants .>> So we're kind of very clear, I think their, their, their land is a very big land. It's a global land. And we are global in production, but not as a broadcaster. And so you know what our focuses is very much about strengthening the broadcaster. In your home markets and being the best you can possibly be at what you do for your viewers at home. On the production side, by production I mean we make lots and lots of programs. But we make them for anyone really. So Bodyguard is very famous, that was on the BBC, we sell to Netflix, we sell to Amazon, we sell all over the world, we send to sales lots to CBS. Doing I love Ireland and possibly I'm a celebrity all over the world. Either our formats either scripted I drama or unscripted are on everywhere. And that is a global scaled production business and that's good hedge for us. particularly when you are exposed to advertising volatility. I mean, everyone in this room will know that advertising is both cyclical and can be volatile. So, that's that. Then, our third big thing has been direct consumer which is where you're referring to the Netflix and Disney. Now, we've never done that before But my view has been very much strategically we have to get into that because we have a huge amount of content that is distinctive and we can commission originals because we know what we're doing in that space. But the key to that was collaboration. We can't do streaming in the UK without being partners with the BBC and vice versa. So we've. We've teamed up with the BBC. It will be called Brit box it will launch in the second half of this year and it is into. It is also about being distinctive because we are not ever going to be Netflix. We don't want to be Netflix. I mean actually Netflix is does a certain thing extremely well. We will very, we will be complimentary tonight. I can tell from the way you're making this case that you've had to argue vehemently for your for your strategy. Interestingly not really. So our shareholders have really got it Really. There isn't one shareholder. They may say actually ironically they may say you're spending enough. Some will say, Can you really win? They'll still ask the right questions about this. What at the end of the day .>> End of the day, they kind of look at you and they go, you've got so much content, archive content, recent content, that actually not to take advantage of something really critical that has changed in the media landscape, which is that Consumers are now willing to pay. When I was at The Guardian, consumers were not willing to pay. They would not pay for content. Well let's talk about that for a second because Fortune's going through the same transition that you're talking about. I I suspect 10 years ago, it these revenue was pretty much all advertised hundred percent, which is which is kind of where we were now while the revenue and you're talking about a transition which 10 years from now will mean How much of your revenue is directed? I wish I could answer that because then I think I would really really have the entire media industry cracked, if I could tell you that. Yes. But I think what I'm sure of is that there will still be. Advertising and linear I think there will still be advertising full stop cuz a lot of people will see the trade off between watching advertising and getting free content. There will always be a free to air equivalent, I think linear will be. Will remain a medium that advertisers will want to be on because it will be the only way you can get mass simultaneous reach at quality and scale and brand safe. So I think there is still a market for that. Yeah, But it will obviously be Less. Worse than half? I don't know but I think it will be less than today because a lot of it will have transitioned to online, so our investment strategies so far has been to really, really invest in what we call ITV hub which is our online offering where you get everything on all of our channels on hub, and an addition to that, When I joined ITV, 18 months ago, we did not have one data scientist. 18 months later we have an entire department which has data scientists, analysts, people that can really interpret data and make the user experience better and personalize and recommend. Now we're on a journey there As they say and we are having to catch up cause no- one in the past thought about doing that and yet we can't compete if we don't do that and that's relevant for advertising Yeah In terms of what we get on video on demand on VOD. It's also really relevant i think when you're all gonna be i hope Birdbox subscribers. [ LAUGH ] Right away. You will have a user experience that is just like Netflix and that's what we've gotta give you, we've gotta give you some Start where, if you're a great fan of drama, we say here are all the other dramas you can watch. If you really love comedy, here's the other comedy we've got. It is very different though- and we talk about this and think about this a lot at Fortune- it is very different to move from a world Where you're trying to create nice environments for advertisers to live in, to one where you're really courting the customer, you have to make sure you give them something they are willing to pay for, and really it's a different mindset. It's I think and you are right, to call it a transition. It's a transition and transformation and some of that is about skills and capabilities. A lot of it is about making sure you get the right skills and capabilities to do both and they're not the same people. And the other thing is a big cultural shift and that is harder. So you can bring people in who have capabilities to do the work. But actually I believe what you have to do is make sure everybody in the company understands the shift you're trying to make and tilts towards it. And it is a different tilt. Yeah. Everything in a broadcaster is tilted to Those big audiences and the big advertising money. So, I think you you shift from tilting to it to optimizing what you do in broadcast, because it's still hugely, Valuable business but you have to tilt towards doing things differently, you have to be a digital company in every way. That means ways of working, it means the way you look at space, it means the way you work. It's quite a bit thing You will have to compete against Amazon and Netflix. You have- But we compete with them for time, right? We're not head to head with Amazon and Netflix. Because it's not like being in broadcast. You're not looking at a share of broadcasting. You don't think there might be a limit to how many subscription service those people would pay for? Yes, I think there will be but I think we have not reach saturation point on that and that's what all the research says. The research says it all comes down to value. People want what they really want and they're willing to pay for it. And they will watch it in their own time because with a streaming service it's not really time critical so they kinda go I can watch it whenever I want. I can watch it when I'm commuting, I can watch it late at night, I can watch it at two in the morning. They're watching off schedule. At the same time I think it's important for me to stress that the broadcast business. 75 % of people are still watching that live. Now if I'd asked you that question, if I [ UNKNOWN ] that question they kind of go 50 %. 40 %. It's 75 %. What are they of people watching live. What are they watching? They watch sport live, obviously. Sports. [ CROSS_TALK ] It's important, I think, again a decent amount of sport because That's a live audience. They watch entertainment live. So especially if it's stripped entertainment so if violence is on and it's on for eight weeks, they will watch it every night. And then the catch up is actually quite small on that because once you missed it, you can't you you will come in, but it'll be a much smaller audience. The thing that is watched a lot on catch up We'll be dramas because you can just stack them up and watch them more and more. Binge watching [ CROSSTALK ] .>> Kind of binge watch or just watch it in your own way. But if it's entertainment and it's on kind of weekly, you kind of watch it weekly. So that drives that still drives [ UNKNOWN ]. You probably, my guess is you don't have time and lives .>> And news of course is news. Thank you for mentioning. Yeah a very big [ UNKNOWN ] and it's so important to us. That I'd kind of take it for granted that people now I mean ITV news is incredibly important. We're a public service broadcast. So you think that will help keep broadcasting alive for a long time? I think it does keep live audiences with you for a long time. You can't do that in pay in the same way. My guess is with the job you have right now you don't have a lot of free time to do this. But if you were going to binge watch. A television show, what would it be? Funny you should say that. You know, I haven't watched any of Victoria, which is an ITV show. I haven't watched any of Downtown Abbey. My goodness. [ GASP ] I know. My secret is out. You need to take a sabbatical. I will literally And I don't get to. So there are shows that I would watch right from the very beginning. So I didn't watch Victoria this year because I haven't watched any of it. So I'll go back to the start and watch all of it. So there's loads of stuff. There's so much stuff. You just miss that's on broadcast. Yeah, I'm still trying to catch up with Game of Thrones. Well. [ LAUGH ] Look, thank you. ->> It wasn't that good apparantly, although I'm a fan. Yeah, it didn't get as glowing reviews. At the end. I thought, yeah. At the end. And right at the end. But we don't have to go there. No don't. [ CROSSTALK ] Fascinating conversation, although brief Thank you for being with us today. Great pleasure. [ APPLAUSE ] [ BLANK_AUDIO ]

MPW London 2019: A Conversation with ITV CEO Carolyn McCall

Leadership

Carolyn McCall talks with Fortune CEO Alan Murray about ushering ITV into the streaming game.