ITV Rivals Pushed Towards Sales House Consolidation
ITV’s largest commercial rivals are understood to be launching discussions to consider consolidating their advertising sales houses to counteract the threat of a combined Carlton and Granada.
Channel 4, Five, BSkyB, Interactive Digital Sales and a number of other broadcasters are pondering whether to combine their advertising sales houses operations to compete more effectively with a single ITV, which would control more than 50% of the television advertising market.
The group of rival broadcasters have already held informal discussions prior to this week’s decision by Trade and Industry Secretary, Patricia Hewitt, to allow the £4 billion merger of Carlton and Granada to go ahead with only slight behavioural remedies (see ITV Cleared To Merge With Sales Houses Intact).
However, further consolidation within the market for airtime sales now looks increasingly possible following confirmation that the two ITV partners will not be forced to divest their sales houses to be run separately (see Advertisers Give Mixed Reaction To ITV Merger).
Such a move would undoubtedly have a negative impact on the balance of the airtime sales industry and could significantly weaken the negotiating power of both agencies and advertisers alike.
According to the Incorporated Society of British Advertisers: “The prospect of an airtime sales market being dominated by a single ITV, coupled with the possible shakedown to only two airtime sales houses for the whole of commercial TV would represent an unacceptable situation for our members.”
David Peters, head of broadcast at Carat, is sceptical about the possibility of this happening. He said: “ITV’s sales operations will be strongly policed by the adjudicator, so don’t think the industry has too much to worry about. However, this might change if ITV finds a way of abusing its dominant position.”
The non-ITV sales operations are currently prevented from combining due to the rules governing the sale of television advertising. However, Ofcom and the ITC announced earlier this week that they have launched an inquiry covering the entire UK market, embracing airtime sales on all terrestrial, satellite and cable broadcasters (see Television Advertising Market Set For Wide Ranging Review).
ITV: 020 7843 8000 www.itv.com
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