New battle lines for TV industry in flux

The TV industry has had an eventful year. ITV underwent consolidation, the Government got stuck into regulation and the BBC is trying to thrash the competition by rescheduling its nightly news. So what next?

Advertisers and media agencies have been faced with a year of consolidation and innovation in the television industry.

As they assemble for the Marketing Week-backed TV 2001 conference in Madrid, they will be bracing themselves for further change.

During the past year, one of the most significant developments has been the consolidation of ITV ownership and with it the demise of the sales house TSMS. A ratings war between the BBC and ITV has also erupted, with the two broadcasting giants clashing over the return of News at Ten to ITV.

In the multi-channel environment, appointment-to-view TV has come to the fore. This is evident with the launch of audience-defined TV stations such as Channels 4’s E4 and the development of the new high rating genre – reality TV – through programmes such as Channel 4’s Big Brother and ITV’s Popstars.

Regulation of the communications industry was also one of the hot topics of the past year with the publication of the Government’s Communications White Paper. The paper recommended that the BBC remain self-regulating, while the rest of the broadcasting industry come under one new single regulator, Ofcom.

Far from being the “communications revolution” promised by the Secretary of State for Culture Media and Sport Chris Smith, the White Paper seemed largely to preserve the status quo.

But the publication of the Commons’ media select committee report into the White Paper last week will ensure that this will be one of the hot topics for discussion at TV 2001 – it recommended that the BBC should be regulated by Ofcom.

The report is also understood to recommend that powers to approve new BBC channels, at present exercised by the culture secretary, should be handed over to Ofcom. It is also expected to suggest a number of changes to cross-media ownership laws – an issue hardly touched upon by the White Paper – including the relaxation of the rules of ITV ownership.

MediaVest chief executive Jim Marshall is sceptical about the effect of the select committee’s report. He says: “The BBC has been extremely fortunate with the timing of the White Paper. With the general election around the corner, what government in its right mind is going to antagonise the most powerful medium in the country?”

The BBC and regulation, a single ITV and ads targeting children, are some of the issues that are to be addressed by Chris Smith in his keynote address at the start of the conference. The publication of the White Paper comes at a sensitive time for the TV industry, which has already been unsettled by the increasingly commercially aggressive stance of the BBC.

It was Greg Dyke who precipitated a direct clash with ITV’s news schedule. After the commercial broadcaster was ordered by the Independent Television Commission, in July last year, to bring back its main news bulletin from the 11pm slot, Dyke decided to move the BBC’s News at Nine to 10pm. The corporation managed to pip ITV to the post by moving its news in October 2000, three months before ITV rescheduled.

Richard Eyre, who has now mysteriously quit his latest job as head of strategy and content at RTL, ended News at Ten just over two years ago, when he was ITV chief executive. The move was intended to attract bigger audiences by scheduling uninterrupted films and drama in late peak slots and past 10pm.

So far, the news at ten battle has been a tactical game with innovative scheduling of key programmes and the removal of end breaks by ITV working to its advantage. But the BBC has come into its own by attracting larger audiences for major news stories such as the Selby rail crash. The jury still appears to be out on the battle for news at ten, with both sides claiming victory.

A senior representative of the BBC will use the conference to evaluate the broadcaster’s initiative to gain more popularity and become more commercial. He will address issues including the battle for ratings between BBC2 and Channel 4 and the decision to launch digital channels in the competitive children’s TV market.

ITV marketing and commercial director John Hardie will be given the opportunity to explain to advertisers how ITV aims to compete with a more commercialised BBC1. He will address how ITV aims to stand out in the digital landscape and no doubt make reference to the &£100m deal with Société Européenne des Satellites for space on the Astra 2D satellite and the negotiations with BSkyB to carry ITV via the Sky Digital platform. The recent strong performance of ITV in the peak-time ratings war, partly due to key programmes such as Who Wants To Be A Millionaire? and Popstars, is likely to get a mention, as well as the performance of rejuvenated soap opera, Crossroads.

But one of the main issues for ITV over the past year has been consolidation, both in terms of ownership and sales structure.

Granada’s acquisition of United News & Media’s ITV franchises Meridian, HTV, Anglia and TSMS in July last year combined with Carlton’s purchase of HTV from Granada and its contract to handle airtime sales for STV and Grampian has resulted in Carlton controlling 47 per cent of ITV ad revenue and Granada the remaining 53 per cent.

Marshall says: “We were concerned that this would reduce competition, but in fairness there has been a lot of competition. And it does not look like there is going to be any consultation [between Carlton and Granada] to reduce this.”

But most advertisers believe that there will be further consolidation, and that Granada and Carlton will eventually merge.

“There is a certain inevitability that there will be one sales house for ITV,” says Sholto Douglas-Home, marketing director of Reuters Kalends. “The management of that process and the protection of advertisers’ interests will be a key issue.”

The departure of former ITV chief executive Richard Eyre from Pearson TV this week will only serve to emphasise the fact that ITV has failed to replace him 14 months on. This could be a sore point, on top of the depleted ad revenues flowing into ITV’s coffers due to the dot-com bubble bursting, the increased competitiveness of other channels and the state of the economy.

Marc Bignell head of TV at OMD UK says: “Advertisers are still continuing to spend outside ITV. Both Channel 4 and Sky are continuing to take a larger slice of the cake. However, ITV has definitely got itself together [since TV 2000 Lisbon], with more clever programming and extra minutage.”

The benefits of digital TV, the convergence of PC and TV, the impact of broadband communications and opportunities afforded by interactive TV will also be addressed at the conference.

With commercial, technological and regulatory developments on the horizon, the coming year promises to be just as lively as the year gone by.

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