In almost all of the coverage of the Government’s decision to let
ITV consolidate, there has been one central assumption - that this is
great news for ITV. And, of course, bad news for almost everyone else
Viewers, rival broadcasters, advertisers. Especially advertisers.
Underlying this assumption is the notion that the television advertising
business is a protection racket. Rackets, naturally, are run by
mobsters, people who exist to turn ruthlessness into an art form.
Everyone suspects that where bullying is concerned, it’s far more
terrifying to face two heavyweights rather than three mediumweights.
Advertisers are said to be scared - witness attempts by the advertising
trade body ISBA to seek a series of reassurances from the network.
Smaller channels such as Channels 4 and 5 are also rumoured to be
discussing ganging together on the sales side.
But what if the assumptions are wide of the mark? Bear in mind that ITV
already has a whole lot of problems. For instance, it hasn’t had a
Network Centre chief executive for a few months now. The prospect of
consolidation has had more than a little to do with that, of course -
what person in their right mind would take on a job that could change
utterly or disappear tomorrow? But it also reflects the fact that the
ITV network is UK television’s smokestack industry - it has nowhere to
go but down. No matter who owns what, ITV’s share of audience is bound
And remember the last time there were major changes on the sales
A decade ago it all began in confusion and it ended in scandal, with
huge holes appearing in the trading accounts. Three into two might prove
an equally awkward sum this time around. One way or another, isn’t ITV
likely to take its eye off the ball in the coming months? Can’t rival
broadcasters and agencies find reasons to be cheerful here?
Perhaps, Colm Feeney, the broadcast director of Western Media, says.
But he doesn’t believe that ITV will take its collective eye off the
ball on the sales side - certainly not to the extent that it did a
Its obsession this year will be to bed down whatever structures emerge
from this summer’s manoeuvrings. So, short term, it will just be happy
to get through this year’s negotiation season. In the long term, though,
the new sales points will be ready for tough talking: ’ITV’s game is to
push for greater share of broadcast deals. They might believe that
consolidation on the sales side will help them achieve that. So Channels
4 and 5 should - and probably will - want to take advantage of any
period of uncertainty this year by trying to get their money now. And
yes, if the deal’s good, we’ll do it. National channels are looking to
increase their share too - and they might argue to clients that it will
make it easier to stand up to tough talking from ITV down the line if
they sort out their deals with Channels 4 and 5 and Sky too. And it will
be comforting to clients to be told that they don’t have to worry so
much about the ITV situation because they’ve already tied up the
Is that the way ITV’s rivals see things? Nick Milligan, the sales
director of Channel 5, admits that this year’s deal-making season will
’Most of ITV’s three-year deals are now up for renewal. In 1997, ITV
delivered 61 per cent of adult impacts and 51 per cent of young men.
Today those figures have fallen to 52 per cent and 42 per cent
respectively. At launch we were 4 per cent of adult impacts. Today we
have a 10 per cent audience share.’
Milligan’s point is straightforward. If money follows audience - and,
increasingly, these days it clearly does - then ITV is facing a tough
season, irrespective of ownership and structural issues on the sales
The days when ITV could demand advertisers give the network a certain
share of their budgets, regardless of good or bad audience performance,
Milligan adds: ’Competition within ITV will still be fierce because
human nature dictates that you look after your own team first. London
weekday versus London weekend will always breed animosity. I would be
fearful of collusion if I thought they liked each other enough to
collude. As for further consolidation, this industry needs competition.
If seven sales points reduce to four, you might as well wire up the
computers. Negotiators might enjoy that environment but there won’t be
any sales people left.’
Nick Theakstone, the broadcast director of MediaVest, points out that
consolidation will bring a complex set of pluses as well as minuses: ’On
the programming side, a consolidated ITV could now argue that cost
savings will allow it to put more investment behind programming - and
certainly in the short term I don’t think there’s going to be much of a
problem about programme commissioning. So I can’t see it taking its eye
off the ball in that respect.
’From an advertiser perspective, it wouldn’t be a good idea for ITV to
act the bully at a time when we’re seeing such big ITV inflation. ITV
peaktime will remain important but, perhaps, people are starting to
learn that you can live without so much of it. You can pick and choose.
Look at what happened with the World Cup - ITV got cocky about how much
people needed it. They’ve scared people off in the past. If there is
consolidation on the sales side, we will see a period when people are
scrabbling about for jobs and the new heads of the new sales points will
be trying to put new teams together. And we will have people selling new
parts of the country. How much of an impact will that have? I don’t know
is the honest answer.’
Andy Barnes, the commercial director of Channel 4, argues that whatever
happens, ITV sales confusion will probably be minimal: ’The situation
now isn’t in any way comparable to the big shake up a decade ago. There
are sophisticated systems in place to control inventory and the way that
the market is polarised, with all the deals being done between October
and February, means that there is less potential for short-term fall
out. As for morale, there might be something in that, but ITV cut out
most of the dead wood a long time ago - most of the people in the
business now are pretty clear about what might happen.
’If ITV is suffering, it’s not because of anything that’s happened
specifically in the past couple of weeks. Channel 4’s sell has always
been a realistic and logical one. We know that advertisers aren’t going
to stop using ITV but we can ask them if they want to keep chasing
expensive ratings or spread their bets a bit more widely. I don’t think
you can say any more than that.’