Just how far is consolidation going to go in the TV market? Last week, the Independent Television Commission issued a consultation document seeking the industry's views on proposals to 'simplify' the TV airtime market. The most significant suggestion is that the UK's national channels should be allowed to merge their sales operations. We're talking about everything outside ITV - Channel 4, Channel 5, Sky, Flextech and GMTV.
The thinking behind this move is that, in an environment where ITV ownership and sales structures are consolidating, the rest of the TV market may also need to huddle together for self-preservation. The assumption here is that market muscle matters, and that if you have a market in which a few big fish swim with many minnows, the big fish will take a disproportionate share of the spoils. Only where all are equal will you have a healthy and competitive market.
So this surely is a no-brainer. The ITC proposals will merely allow for a redressing of a balance disturbed by recent ITV sales restructuring.
Further sales consolidation is not only inevitable but something that the industry should welcome unreservedly, isn't it? After all, a few months back there were unconfirmed reports that talks between some of the national channels - for instance, Channel 4 and Channel 5 - had already taken place.
Well, perhaps. Some sales sources say it isn't as simple as that. They argue that consolidation could actually harm smaller channels. ITV doesn't actually need selling in the full sense of that word because it's already over-demanded. Smaller channels need passionate advocates.
So is more consolidation on the way? Would it be welcomed? And who's likely to get into bed with whom? Paul Parashar, the broadcast director of New PHD, agrees that the national channels have to think about their response to ITV consolidation but he doesn't believe that sales is the primary issue here. He states: 'It might be driven by the feeling that there might be beneficial arrangements beyond the sale of spot advertising.
It could be about making the best use of platforms and things like subscription issues and transactional deals.'
But Parashar reckons that raw spot advertising market dynamics may also have a part to play too. He says: 'You could argue that consolidation is going to happen. The worst thing for the market is often an imbalance between weak and strong players. That may well be a factor. I take on board the argument about needing dedicated sales teams at this end of the market but it's a fine balance. You need to get on the radar. And it helps to be able to trawl from a bigger pool. That doesn't mean that you can't have people whose job it is to sell the concept of the channel.'
Some sales sources insist that you don't have to have a perfectly 'balanced' market. Follow that logic to its extreme conclusions, they say, and you might as well hook up airtime sales department computers to buying department computers and everyone can then go home. They insist that buyers tend to think of their own convenience rather than what's best for their clients.
And, anyway, shouldn't buyers be worried about competition issues if consolidation continues? Tom George, the broadcast director of Zenith Media, does not appear to be worried. He comments: 'The issue for us is always true accessibility at a fair price. And, of course, you can debate forever on what a fair price is, but any relaxation in the rules potentially threatens this because it reduces competition and raises the spectre of conditional selling. But the reality is that there is an air of inevitability about this. And, after all, Zenith set up more than a decade ago because we predicted there would be consolidation.'
And he doesn't believe we're going to see much restructuring. 'If Channel 4 and Channel 5 got together, you could argue that it would allow a buyer the ability to tie up a greater audience share in one negotiation. But would the likes of Channel 4 see any advantage in combining with Channel 5? What advantage would it actually deliver? What would the addition of Channel 5 add to the proposition? Channel 4 may take the line that it has a highly demanded product, so why would it want to go down a commodity route? If you play a commodity game, you really want to be the biggest in the market,' he says.
Steve Booth, the managing partner of BLM Group, agrees. 'On the assumption that the constituent parts of ITV truly act as one, then consolidation amongst the rest of the commercial players will become irresistible. But while melding parts of ITV together is plain common sense, lumping disparate national channels together would need more careful consideration. I would argue that Channel 4 might dilute the perceived purity of its offering by selling any other channel alongside its own. Anything that moves its play towards that of a commodity sell risks damaging its premium status,' he says.
'By the same logic, Channel 5, with its slightly tacky image, may find getting a dance partner a bit tricky. Consequently, it may feel compelled to invest heavily and quickly in programming to enhance its image and become more attractive to the likes of Sky or Channel 4. RTL's growing involvement of late bodes well in this respect,' he adds.
Booth believes that, with this in mind, we might see national channels finding themselves having to improve the quality of their audiences as well as their audience share as they continue to ensure they aren't forced into the commodity end of the market, where they will become marginalised.
Mike Moran, the commercial director of Toyota UK, echoes much of that.
But he adds: 'I'm not at all surprised that further consolidation has been mooted and you can see the logic in it, especially where Sky and Flextech are concerned, though I'm not so sure about Channels 4 and 5.
Especially now that RTL is taking a greater interest in Channel 5 and it now has ambitious programme budgets and targets, it can argue that it has a clear strategy of its own, thank you very much. So does Channel 4. So if they got together, would it make much difference to me? No it wouldn't. Channel 5 already does pretty well where we're concerned and I'm not sure it could improve on that. The same could be said for Channel 4. It's hard to see where the synergies would come from. Both have such differentiated offerings. There might be some cost savings there, but would they be passed on to me? I doubt it.'