Micropayment revenues for TV companies may be just that, microscopic

OUTLOOK

What Rupert Murdoch did to his UK newspapers, he is doing now toUS television. No, this is not a point about collapsing ethics. Itis about paywalls. Fox, News Corp-owned home to The X Factor and TheSimpsons, is pulling back from an experiment that made just-airedshows available for free on the internet via the website Hulu.com.ABC, the American network owned by Disney, is contemplatingfollowing suit.

Meanwhile, on the other side of the Atlantic, ITV says it willintroduce a micropayments system to enable it to charge for shows onits online player from January. The launch is already behind theoriginal schedule, and Adam Crozier, chief executive, says therewill be an initial period of experimentation as the company wrestleswith the question of what viewers are willing to pay for. As SeeSaw,which tried to sell episodes of South Park and Spooks to the UKpublic, discovered, the answer to that question seems to be: not awhole lot.

Can either of these experiments spare television from the fate ofthe music industry, and turn the internet from a threat to a sourceof new, sustainable revenues? The omens do not look good.

Mr Murdoch is a Cnut, almost single-handedly trying to hold backthe tide of free content on the internet, and such is the might ofNews Corp it is tempting to think that if anyone can, it will. BSkyBin in the UK is about to launch an experiment of its own, withmonthly subscriptions to Sky Go, a digital player for its programmesonline and on mobile devices.

But The Times and The Sunday Times traded influence for minimalextra revenues when they put up their paywalls, so it willultimately prove it is down on the deal.

And Fox's latest pull-back from Hulu is a defensive move,designed not to generate new revenues but to protect hard-wonexisting ones. Cable television operators, who include Fox in theirbundles of television channels, pay News Corp for the privilege, andthey are angry that the same content turns up elsewhere for freealmost instantaneously, To assuage them, only authenticated cablesubscribers will now be able to watch Fox shows on Hulu until eightdays have elapsed and they become free to all.

All of which is to say that Mr Murdoch has learnt that makingmoney from his TV content is best done by dealing with theintermediaries. These content bundlers, big companies all, are theones who really can be squeezed. Charging viewers directly would bea costly pain, even it worked. Much more likely, most users wouldtune out, and dedicated fans would be driven to piracy.

As ITV works to sweat its assets and generate more money from itsprogrammes, micropayments look the least likely route to success.

After a breather, bond traders test eurozone

Perhaps it was the surprise that European leaders had managed tocome to an agreement at all, rather than kicking the can down theroad. Perhaps it was the sheer incomprehensibility of aspects of thedeal. For whatever reason, it has taken financial markets a ratherlong time to identify the holes in the new bailout plan for Greece,agreed last week.

Now, though, the bond vigilantes are back. Italian and Spanishinterest rates were rising again yesterday towards the level thatterrified EU leaders earlier this month. The immediate cause?Germany's Finance Minister, Wolfgang Schable, wrote his stern letterto Bundestag members telling them not to stoke panic by questioningthe financial position of these big and pivotal eurozone countries.

The letter had a touch of the Lance-Corporal Jones of Dad's Army,and by stating the obvious - "It would be a mistake to think thatthe crisis of trust in the eurozone can be solved by a singlesummit" - Mr Schable seemed to set off the very reaction he wassaying was unjustified. With Greece and now its neighbour Cyprusgetting the credit rating downgrades implied by last week's deal,the markets remain in febrile state. And, unjustified or not, bondinvestors are no fools. We already know Deutsche Bank has slashedits holdings of Italian government debt by nearly 90 per cent sincethe start of the year. No one wants to be last out if there is areal run.

The important of Mr Schable's letter, of course, is that ithighlights once again how the politics of even the latest bailoutplan is tough for Germany. Opposition to a "transfer union" is morelikely to grow than diminish over the long summer recess.

The most obvious hole in the latest bailout is the failure toincrease funding to the European Financial Stability Facility. Suchan increase will be needed for the EFSF to be able to fight the bondmarket, should it turn on Spain and Italy.

It looks as if traders are determined to test the eurozone'sresolve sooner rather than later.

Ofgem makes an example of British Gas

Ofgem's latest 2.5m fine on British Gas, over failures in itscustomer complaints procedure, is "totally disproportionate", thecompany said yesterday. Too right it is. It should have been higher.

The fine, barely a day's profits, comes after the energyregulator found British Gas failed to reopen customers' complaintswhen they felt they had not been resolved, and didn't tell them theycould appeal to the Energy Ombudsman when things reached an impasse.

The fine, though, is meant as a warning to other firms. Treatingconsumers with disdain is still too often par for the course atBritish Gas, but the fact that many of the offences relate to smallbusiness customers makes it all the more important to make anexample. When even bigger-spending business customers cannot getfair treatment, what hope is there for the rest of us?