Rivals should take precautions after ruling on ITV sales
campaignlive.co.uk, Thursday, 16 October 2003 08:00AM
It seemed appropriate that ITV1 should score such a success with its Henry VIII biopic last Sunday. Its portrayal of the towering Tudor as an oversized, megalomaniac despot seemed in line with some people's views of the network that screened it, writes Ian Darby.
Carlton and Granada's political skills may be more refined than those of the war-mongering, sexually driven Henry, but they've been as successful in getting their way.
However, as in all highly charged political scenarios, it will be fascinating to see how the big gorilla's rivals will react. Assuming ITV can comply with new rules, a merged Carlton/Granada sales force is an inevitability.
So agencies and advertisers are looking closely at what the likes of five, Sky and Channel 4 will do. Some consolidation seems a foregone conclusion, but the Independent Television Commission is inviting views from interested parties before deciding whether this domino effect should get the green light.
Despite its apparent willingness to co-operate in the creation of a single sales house that will account for 52% of the TV sales market, the ITC is all too aware that joint selling from other sales operations could lead to a "duopoly with the merged ITV sales house, leading to a reduction in competition overall". So it wants views on three options: a merger of all the other larger sales houses with share greater than 5 per cent, a merger of two of these or a merger of the larger sales operations with the smaller players.
Some agencies are already salivating at the prospect of such scenarios. But others, including Universal McCann, remain opposed to a duopoly while arguing that the contracts rights renewal remedy protects ITV's sales rivals because it caps ITV's share ensuring others won't be squeezed. But this will depend on whether the remedy itself works. ISBA, in its initial statement on the merger last year, was very concerned about the knock-on effects of the merger. It argued against an "ITV/rest of the world duopoly" because it would damage advertisers seeking fair conditions of trade.
Channel 4, Five and Sky are keeping their counsel but talks about some level of consolidation seem inevitable. Reports have suggested that Channel 4 is likely to be left out in the cold but given its 20% share of revenue and strong audience profile it would remain a strong, if weakened, ITV rival. Smaller operations such as GMTV, Viacom and Turner have said that they are not interested in consolidating but until the ITC and Ofcom report back on November 14, the situation is up in the air.
Another issue for an industry that conducts a percentage of its deals on a wing and a prayer is the Competition Commission's recommendation that the ITC and Ofcom consider a review of the overall UK TV advertising market "in due course". Expect more skeletons than were found in Anne Boleyn's closet.
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This article was first published on campaignlive.co.uk
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