On Thursday, 15 October 2009, Marketing Week reported that Channel 4 and YouTube had reached a content sharing deal, http://tinyurl.com/yheq428.  This is important because it marks the first time that the broadcaster has opened up its property to a third party and secondly because it gives Channel 4 the opportunity to sell advertising around some non-Channel 4 content on YouTube.  Over the last few months the debate surrounding traditional media, online content and revenue models in the 21st century has provoked passionate arguments from governments, regulators, media owner, and advertising and public relations agencies.  James Murdoch has suggested that commercial broadcasters in the UK should be entitled to a share of the BBC licence fee.  Meanwhile, the ABC network of Australia reported excerpts of a speech made by his father, Rupert Murdoch, in Beijing recently.  “The philistine phase of the digital age is almost over”, he claimed.  Murdoch went on to argue that, “The aggregators and plagiarists will soon have to pay a price for the co-opting of our content.  But if we do not take advantage of the current movement toward paid-for content, it will be the content creators, the people in this hall, who will pay the ultimate price, and the content kleptomaniacs will triumph.”  Over the summer, one of News International’s key UK titles, the Times, published the findings of a young Morgan Stanley intern, Matthew Robson, who compiled a report for the bank on how teenagers consume media and online content.  According to Robson, the next generation will refuse to pay for news and expect this service to be free.  Even music will only be reluctantly paid for if there is no alternative and most have never bought a CD.

This debate will continue for years to come as media and content owners seek to maximise the return on their investment while consumers have become used to the idea of free content and access.  It is very easy to believe that a big international story in the US and UK media reflects a global view.  However, this debate may be peculiar to the West and the English speaking world in particular.  According to Mintel Global Market Navigator, other TV advertising markets are continuing to grow at a healthy rate.  China’s TV advertising spend grew by 31.7% in 2005 before dropping back to a steady double digit growth of 13.5% in 2006, 14.1% in 2007 and 13.1% in 2008.  It is a similar story in Russia.  In 2004 and 2005, Russia’s TV advertising market grew at over 37% and it only dropped down to less than 30% last year when it reached 12.2%.  Russia is forecast to see a slight rise this year to 15.4%.  Malaysia and the Ukraine have also experienced continuous, if more modest growth and this year should see increases of 9.8% and 15.9% respectively.

The way we consume media and the business models of the media are changing and adapting to the opportunities presented by Web 2.0.  The danger in the West is that we end up with informed elite who pay for high quality news content and those who are either unwilling or unable to pay for news and thus become an information underclass.  The Channel 4 YouTube agreement could provide a glimpse of how the English speaking market will develop over the next generation by bridging the gap between the two poles of today’s debate.