RTS Cambridge Convention 2013: UK Keynote - Richard Desmond

RTS Cambridge Convention 2013: UK Keynote - Richard Desmond

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Thursday, 12th September 2013

Richard DesmondChannel 5 owner Richard Desmond made his first speech to the RTS and, by his own account, one of the very few speeches he has ever made. “I’m not one for making speeches,” he told attendees – “but I promised my mate David that I would do it. When I say I’ll do something, I do it.”

He quipped: “I think David (Abraham) looks on me as his Big Brother.”

Desmond recalled that it was three years and three months since he bought Channel 5: “My entry to the posh world of PSB wasn’t universally welcomed at the time.”

But he claimed he had brought growth and stability to all the sectors he operates in, and C5 was no exception.

“I see a lot of people here who could have bought C5 – but they didn’t. It was losing share, advertising and money,” he added.

Questioned by session chair Jeff Randall about his broadcast business strategy, Desmond said: “Our five-minute plan and our five-year plan is the same: 

  • Grow the business
  • Work with like-minded people
  • Seize very opportunity without going broke.

“This is the friendliest industry I have worked in,” he added.

So what did Desmond see in C5 that its previous owner RTL couldn’t? It was not, apparently, rocket science: “Put on better programmes that people would watch and sell more advertising (by not having rows with advertisers).”

But could he have done it without cross-promotion from his newspapers?

“We’ll never know,” he responded – but conceded that he wouldn’t like to have tried.

Desmond also recounted the early history of his publishing operations, overcoming numerous obstacles placed by rivals – and of “doing what I said I would do”.

He described getting all the staff of the then-struggling OK magazine together to ask them whether they should continue with a venture that was losing £1m a month and still having to make big pay-outs for exclusives. They voted to carry on.

Another turning point was the invention of Brand Beckham. He said he asked the Beckhams: “How do we make you the new king and queen of England? David laughed. Geri simply asked how?” Their wedding issue put OK firmly into the black.

“If you are an outsider it is better to retain control. I love the businesses I’m in, and very proud of what they achieve under my control,” he said.

Turning to television, he said: “When Channel 5 gets in range of ITV in peak, I get out the big cigar. More big cigars please, Ben [Frow, director of television at C5].”

He argued that “some of the big bets in TV are being made by platforms that have no public-service obligation, such as Virgin and BT. And the tax payers of Google and Amazon do not fall under any regulation at all.”

PSBs, he went on, should be able to charge pay-TV for the privilege of showing the most popular channels on their platforms.

“It is easy to jeopardise the future of PSB but impossible to recover from,” he warned.

Desmond listed some of his charitable initiatives. Awaiting eye surgery he said he debated with himself how much he would pay to save his sight: “£100m? Yes. £200m? Yes. Everything I own, every magazine and channel? I don’t know. What I do know is that funding the construction of the Richard Desmond Children's Eye Centre – I got out bloody cheap.”

Asked whether he recognised that Channel 5’s close relationship with advertising media company GroupM was a problem for independent producers, Desmond was candid. From Channel 5’s approximately £400m in ad sales, up to half comes from GroupM; plus 30%-40% of Northern & Shell’s newspaper ad revenue; and £20m of the magazines’ £50m ad sales.

“It a very difficult situation, when GroupM says it will cut you back by 10%-15% if you don’t do what it asks,” said Desmond. “I’m not happy about the GroupM [pressure], I’d love to do something about it. But I don’t have 10-stone testicles.”

The session was produced by Diana Muir.

Report by Gordon Jamieson. Photo by Paul Hampartsoumian.


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