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We live and work in exciting times - revolutionary times. Technology continues to recast the media industry.

The extraordinary advance of affordable personal digital technology and the stellar rise of social networks are both distrupting and transforming the media market making this a unique moment to be involved in the convergence sectors we focus on.

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Tuesday, 28 July 2009

Friends Reunited on the way out for £15m?

Reports are circulating that ITV may be selling Friends Reunited for a knock-down £15million, a business it bought for £175million four years ago.

If true, even in these pressured commercial times it says a lot that they are prepared to consider selling the business and taking a paper loss of £160m, and that's before we add up the amount of additional investment, salaries and marketing that has gone into the site since 2005.

The likes of Facebook, myspace and Bebo made the paid-for subscription business model obsolete remarkably quickly, but in ITV's defence, these voracious competitors are not generating profits even now. While NewsCorp and the other social networking site backers are happy to wait and see what the profitability model is, ITV simply doesn't have the pockets deep enough to fight back. It's another example of ITV being a big UK player, but a tiny Global presence.

Stick to the knitting and you might eventually make a jumper to keep your warm in the winter - as someone famous used to say. Make some good TV and sell advertising, that's what you should be good at ITV.

1 comment:

Bruce said...

No - the astonishing aspect of this story is that anyone would pay £15m for Friends. Especially in these times of less money. Has the world of media learnt nothing? What on earth would you buy it for? The concept? Copied. The database? De-dupe it against FB and you might have 3 unique names. The brand? Dated and irrelevant after FB. If whoever at ITV does manage to sell this brand for £15m, he should receive marketer of the year. And if you were the guy responsible for it at ITV, why on earth would you now sell it for an c.£150m loss? Do the usual manageent presentation showing upward pointing trend & enthusiastic income predicition graphs over the next three years and then quickly leave before the full scale of the debacle becomes apparent.