The Government caught everyone on the hop with its media ownership proposals. Not only would Rupert Murdoch’s empire be permitted to buy Channel 5, but US companies such as Disney, AOL Time Warner, Viacom or Discovery could take over ITV or its constituent parts – most prominently Carlton and Granada.
No less an organ than the Financial Times had twice splashed the story that Murdoch was to be thwarted in his ambitions for a terrestrial licence. The Guardian had said the same, with great authority, just the day before the Government published its draft Communications Bill. The Evening Standard was running the same line even after the bill had come out.
Meanwhile, no one in the media seemed to have had an inkling that ministers were about to abandon half a century of broadcasting policy and allow any foreign broadcaster the chance to own one of the UK’s terrestrial TV companies. When European companies were given that freedom some years ago, we presumed it was because the UK, as a member of the EU, had no option. We consoled ourselves with the thought that at least UK companies could reciprocate and take over German, or French, or Italian broadcasters. Yet in the case of the US, the Government has apparently not even bothered to ask if the US would change its rules to accommodate a UK company buying into its TV industry.
How did this happen without the media – or the industry – knowing? Either the Government kept its cards very close to its chest, or the decisions were taken very late indeed. Although the FT, predictably, put forward the latter view – claiming there had been a change of policy at the behest of Downing Street – I am assured that the policy was decided some months ago by the two relevant departments, the Department for Culture, Media and Sport (DCMS) and the Department of Trade and Industry (DTI). The reason it didn’t leak was that only five people knew, including the relevant Cabinet Ministers – Tessa Jowell and Patricia Hewitt.
Jowell, speaking at a Broadcasting Press Guild lunch last week, insisted that the decisions had been taken by the DCMS and DTI. She said they had been persuaded during lengthy consultation that, now giant foreign companies like Vivendi Universal could take over ITV (because it is based in France), it was illogical that other large international players could not. As for the idea that – if they really didn’t mind Disney or AOL taking over ITV – ministers should at least have tried to get a reciprocal deal, allowing UK companies to take over United States broadcasters, she simply couldn’t see the point.
Yet who can blame her? For which British media company is in any position to start making forays across the Atlantic? That game is long lost. Carlton and Granada cannot even keep ITV Digital going, let alone contemplate bidding for a tempting US morsel. BSkyB may be technically British (like News International), but it is controlled by the international Murdoch empire. Telewest and NTL are also US-owned – thank Heaven for small mercies, given the amount of debt they are labouring under. And BT – which did, at one time, try to rule the world – has scuttled back into its home territory, licking its wounds. Only the BBC is large enough to have a go, and though it owns 20 per cent of the highly lucrative Animal Planet (through its partnership with Discovery), that is not the corporation’s function. The fact is that, in many ways, the Government’s media ownership decisions were profoundly unsurprising. Most of the British media industry has become foreign-owned without us even noticing, or caring. Our national newspapers (which we did care about) have long been dominated by overseas proprietors: Beaverbrook, Thomson, Murdoch, Black. Channel 5 is controlled by Bertelesmann-owned Radio Television Luxembourg, which took over the great British names Pearson Television and Thames Television without any great fuss. Disney has been a shareholder in the (loss-making) GMTV ever since it won its licence from the once (albeit briefly) Saudi-owned TV-am.
The 40 per cent of homes with multi-channel television are knee-deep in American TV companies – Nickelodeon, MTV, Discovery, Disney, Fox Kids, Cartoon Network, CNN, Paramount Comedy Channel – and, on Sky One and E4, American programmes. Even a wholly British-owned company like Channel 4 relies unduly heavily for its ratings and reputation on US shows such as Friends, ER, Frasier, Sex and the City, Ally McBeal and The West Wing.
In magazines, IPC has been bought by AOL Time Warner, making it as US-owned as National Magazines (Hearst) and Condé Nast. The once-British (and Irish) outdoor industry is largely controlled by the Americans and the French. Even local newspaper groups are falling to the Americans. Only commercial radio – which was dominated in the Seventies by Canadian companies, and in the Eighties by Australians – remains almost entirely British, and even that may change under the new rules.
Do the changes matter? That all depends on the single regulator, Ofcom. For, as seasoned American observers pointed out last week, US broadcasters do not understand the concept of public service broadcasting. If Disney buys ITV and Murdoch Channel 5, the new, supposedly “light-touch” regulator may have to get heavy.
Whether it gets the powers it needs will be decided as the bill progresses through Parliament over the next year. The battle for control of British media isn’t over yet.
Torin Douglas is media correspondent for BBC News