Feature: Cashing In On The Communications Bill
The Communications Bill is set to become law later this year and the media ownership regulations will be relaxed in a move that could signal the biggest shake-up of UK media for many years. Broadcasters are clearly bracing themselves for change, but there appears to be a general feeling of uncertainty about how the new legislation will affect the industry as a whole.
The latest annual Media Brands study from Ocean Consulting surveyed 59 directors from 25 agencies to gauge how they see the media landscape developing in the two years directly after the Communications Bill becomes law. It shows that almost 50% of respondents expect the TV industry to experience the most significant upheaval, as it comes to terms with the possibility of a single ITV and large newspaper groups such as Rupert Murdoch’s News International being allowed to own Channel Five.
With Carlton and Granada’s proposed £2.6bn merger already under the scrutiny of the Competition Commission it is no surprise that a significant proportion (50%) of senior agency figures felt that ITV would be the primary catalyst for change in the TV sector. Alan Renwick, director of Ocean Consulting, says: “Most people already refer to ITV as a single entity, indicating that the merger is viewed as something of a foregone conclusion.”
Almost one in five of those surveyed felt that BSkyB, which is rumoured to be planning a number of new launches, would be the most significant player in the newly deregulated market, while just 4% opted for Channel Five as the main driver of change, despite the fact that TV’s new kid on the block could prove an attractive option for prospective bidders.
Regardless of the potential for widespread upheaval within the TV sector, almost one in five agency directors were convinced that the radio market would undergo the most significant change in the years following the Communications Bill, as the key media owners and foreign investors rush to take advantage of the potential for greater consolidation within the sector.
The majority (38%) felt that Capital, which is poised to link with Disney to launch a national radio network for children, would be at the forefront of developments in the sector. As Alan Renwick explains: “People are aware that Capital has got enough critical mass to be a driver of change by potentially swallowing up smaller companies. However, it could also prove an attractive option for foreign corporations such as Viacom and Clear Channel.”
Lowry Mays, chief executive of Clear Channel, has already revealed that he would like to take over one of the UK’s major commercial radio groups and 13% of senior agency figures identified the American-owned conglomerate as the primary catalyst for change within the sector. Other major radio groups including Emap and SMG were also recognised for their ability to alter the face of the commercial radio industry.
Senior agency figures predict that radio will be one of the ‘big winners’ of the future, while commercial terrestrial TV will lose out to the increasing number of multichannel broadcasters. However, there is still an underlying feeling of uncertainty as to how the industry will develop over the coming years.
With Lord Puttnam threatening to lead a rebellion of peers opposed to the liberalisation of the cross-media ownership regulations, a degree of ambiguity surrounds the Communications Bill and what form it will take when it eventually becomes law.
Renwick emphasises that this is causing media agencies to become confused as to how the media landscape will change once the Bill is passed. He says: “The big commercial players will no doubt be the main movers, but there is a general feeling of vagueness as to exactly how things will evolve over the next few years.”
The Communications Bill recently had its second reading in the House of Lords and is about to move on to the committee stage. It is hoped that the Bill will receive royal approval by the end of this Parliamentary session, clearing the way for it to become legislation by the end of the year.
Subscribers can access ten years of media news and analysis in the Archive