C5 award sparks fresh sales fears

The advertising industry has renewed its warning about the dangers of concentration in TV airtime sales.

The move follows the Independent Television Commission’s decision to award the Channel 5 licence to Channel 5 Broadcasting – a consortium comprising Pearson, CLT and MAI.

Channel 5 Broadcasting has yet to publish any details of its airtime sales arrangements. However, agencies are concerned about MAI being involved in the winning consortium. MAI holds two ITV licences, Meridian Broadcasting and Anglia TV.

Channel 5 will launch in January 1997, and serve about 70 per cent of the UK with a broad mix of popular programmes. It has pledged to adopt a “complementary” approach to scheduling so as not to cannibalise ITV audiences.

However, JWT is among a number of agencies expressing concern about the likely impact of Channel 5 on existing commercial TV audiences and airtime sales practice.

“The two ITV areas where Channel 5 is weakest are served by Meridian and Anglia,” says the agency’s media development director James Walker. Airtime sales for both ITV companies are handled by TSMS – which is now controlled by MAI. “This means that in these two areas, advertisers will not be able to take advantage of increased competition.”

Walker suggests it is likely TSMS will now lobby the ITC to be allowed to sell airtime on behalf of Channel 5. Existing rules restrict sales houses from selling both a regional ITV station and a national commercial terrestrial station.

Others question whether it will be commercially viable for Chan nel 5 to adopt scheduling that is complementary to ITV. “There is research being touted by TSMS showing that 80 per cent of Channel 5’s viewers will come from ITV,” says one senior media buyer.

“It will be a nightmare if all Channel 5 does is take five per cent of commercial TV viewers, because ITV’s price will go up as its audience declines.”

Even so, agencies are generally welcoming the ITC’s decision to launch a fifth terrestrial channel.

An agency TV buying director says: “It has made me feel a lot better about my future deals.” He adds that he relishes the chance to use Channel 5 as a stick to beat ITV and Channel 4. “We’ll give them until 1997, then we’ll get them.”

ITV companies are already responding by encouraging agencies to strike longer deals of up to two or three years, which would carry them well beyond the proposed start of Channel 5. However, some buyers are preparing to alter deals negotiated with ITV and Channel 4 to stop them rolling over into 1997.

Details of Channel 5 Broadcasting’s sales arrangements are not expected until a sales director is appointed. Consortium spokesman Roy Addison says: “It is likely the roles of sales director and marketing director will be separate as marketing will be such a big issue.”

Speculation is rife about the identity of the sales director named in a “sealed envelope” of proposed executives submitted to the ITC as part of the Channel 5 Broadcasting bid.

UK Gold/UK Living sales director Nick Milligan, Channel 4 head of sales Andy Barnes, Laser Sales deputy chief executive Derek Hemment and former LWT sales head Ron Miller are among the likely contenders, agency sources suggest.

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