Media Perspective: Talk of the devil may be premature after Sky'sITV acquisition

By by Ian Darby, campaignlive.co.uk, Friday, 01 December 2006 12:00AM

While Michael Grade is being portrayed as ITV's white knight, Rupert Murdoch's critics have once again moved him to the gates of hell as the devil incarnate. After facing an avalanche of criticism in the US over plans to broadcast a distasteful OJ Simpson documentary, he's been branded a meddling, anti-competitive little imp by his UK rivals following BSkyB's acquisition of a 19 per cent stake in ITV.

Predictably, the biggest criticism has come from Sir Richard Branson, the largest shareholder in ntl, who said: "The Government should stand up to Murdoch. I don't think that the public want him to wield the power he does."

Many have no time for Branson's attacks on Murdoch, his son James and BSkyB. As Greg Dyke pointed out, there's a definite whiff of sour grapes emanating from Branson's pantry after Murdoch's meddling effectively killed off ntl's own bid for ITV.

Yet there lurks a genuine fear that in adding a large stake in ITV to their Sky empire, the Murdochs are behaving in an anti-competitive manner. Ofcom and the Office of Fair Trading will decide on this. In Sky's favour, it could be argued that its move will at least allow Grade some breathing space and the programmers some time to get their schedules in gear. But should advertisers be worried about this turn of events?

In purely emotional terms, critics seem distressed that the company with a monopoly on UK digital satellite TV can also become the largest shareholder in the country's most significant terrestrial player. They will also wonder whether Sky's management will be able to resist sticking their oar into ITV's Freeview strategy and its bidding for sports rights.

But Sky's move seems more likely to be about protecting its market position by scuppering ntl's bid and ensuring that it has a major say in who is the next owner of ITV. This is unlikely to have too much of a negative impact on advertisers.

Unless perhaps it serves to stagnate the TV market to the extent where nothing can happen without Sky's involvement. Its power in the press market could provide some lessons: it has a 24 per cent share of UK national press display advertising and could already be said to be indirectly stifling competition (last week the Daily Mail & General Trust said that there is little point in bidding for the Daily Mirror because of the power of The Sun). On the flipside, Sky's share of TV advertising is significantly lower, and its interest in ITV could provide the commercial muscle that is needed to match the BBC's record investment levels.

All that its rivals can ask for is a level playing field and that Murdoch and Sky get the same treatment as everyone else, however unlikely this may be given this Government's track record of cosying up to the old devil.

This article was first published on campaignlive.co.uk

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