Culture secretary Chris Smith promised a media revolution with the communications white paper published yesterday (Tuesday). While some of the changes promised may irrevocably alter the face of UK media, ministers have held back from storming the citadels of public service broadcasting.
Advertisers should be alarmed. The white paper confirms that barriers to merging ITV’s owners, Granada and Carlton, into one company will be brought crashing down, paving the way for a single owner of Channel Three.
In short, advertisers fear that a single ITV company will be able to hike advertising rates, and they will have little protection. It may be three years until the new Communications Bill is enacted, giving advertisers plenty of time to prepare for the new realities of monopolistic airtime negotiations in the 21st century – and lobby for greater protection.
ITV is the best – some would say only – medium for advertisers to communicate with the mass market. ITV may argue that consolidation will lead to greater programme budgets and more spectacular TV programmes, and that is fair enough. But a single ITV also threatens to squeeze out the smaller advertisers and make those who are left pay more.
Nevertheless, through trade body the Incorporated Society of British Advertisers, advertisers are unlikely to take this lying down.
If ITV is to be regulated, like any other business, by the competition authorities, advertisers will have recourse to these watchdogs if they believe a single ITV is likely to be anti-competitive. But looking at experiences in other sectors, they may be wary of putting too much faith in the likes of the Office of Fair Trading or the Competition Commission.
But to the surprise of media owners, the Government has shied away from opening the floodgates of media consolidation. Rather than sweeping away the complex rules on cross-media consolidation, ministers will only say they “invite” comment on proposed reforms. This, at least, is one piece of good news for advertisers. The prospect of buying ads across different media from the same sales point is off the immediate agenda.
Much has been made of the political expediency involved in drafting this white paper – just a few months before a general election, there is naturally an unwillingness to rock too many boats. But the voice of the advertisers may be lost in the cacophony of praise for the Government. Already, Granada chief Charles Allen has called the white paper “a bold step forward” while Carlton’s response has been a more muted “welcome”.
The interests of brand owners are hardly an election issue, so why should anyone listen to them? But rest assured that advertisers – deft exponents of the persuasive arts – will lobby Government hard to protect their interests.