A new landscape for media owners

The maze of rules about who can own what in the UK media industry makes complex reading. In fact, they’re so complex that a local radio station buying a local newspaper can pay more in fees to lawyers to study the rules than the value of the acquisition.

Unlike other industries, which are regulated in the round by competition authorities, the ownership of TV and radio licences, and local and national newspapers, has long had its own set of rules. And you can see why. The spectre of powerful vested interests dominating media outlets and pursuing their own agendas could wreck pluralism and appear distinctly undemocratic.

But the world has changed. Technological developments have a nasty habit of outstripping the laws which are intended to regulate them. The growth of the Internet and digital TV and radio have prompted a wholesale review of broadcast regulation. Just what will appear in the Communications White Paper published this autumn is the subject of much speculation.

In a world where there are hundreds of TV channels, dozens of digital radio licences and declining newspaper sales, media owners believe, in the words of one, that the old rules are ‘outdated, restrictive and detrimental to UK business’. The prospect of a media mogul controlling huge swathes of output is diminishing with every specialist digital TV channel launch. And there are plenty more to come.

Many media owners are confident that a significant relaxation of the rules on cross-media ownership is highly possible. It could open the floodgates of consolidation and a land grab battle to own as many media outlets as possible.

So should brand owners worry? Probably. The Incorporated Society of British Advertisers has expressed its opposition to the inevitable merger of ITV’s owners into two, then one, company. It sees the sales houses’ power in negotiations with brands growing strongly and, by extension, it fears that media owners with fingers in many pies could exert considerable power over advertising sales.

Some foresee a world where multinationals have one buying point on each continent.

The answers are in the hands of two troubled ministers: Culture Secretary Chris Smith and the Department of Trade & Industry’s Stephen Byers. Together they are preparing the Communications White Paper and have expressed a desire for a ‘light’ regulatory touch.

Relaxing cross-media ownership rules is one thing, replacing them another. But it seems clear some lightening of the rules will take place, and media owners will jump at the chance to bulk up. There is little advertisers can do about it.

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