NewsLine Column: An Important Year For UK Media

As 2003 draws to a close, James Papworth, ad marketing manager at IPC Prospector, looks back at an important year for the media industry, which was rocked by the war in Iraq, the birth of the Government’s long-awaited Communications Act and the clearance of the ITV merger.

Almost a year ago, in this very column, I quoted the physicist and Nobel Laureate, Nils Bohr, who said “prediction is very difficult, especially if it’s about the future”. I was referring to 2003 and what might happen.

Now 2003 is almost over and we can look back at what did happen. This is far easier to do because as film director Billy Wilder said, “hindsight is always twenty/twenty”.

A year ago the predominant thoughts in our minds were mergers and acquisitions. Would ITV merge and would the US acquire Saddam Hussein, and what might the knock-on effects be?

Although both cases have come to pass the knock-on effects have not, to date, been as significant as they might have been.

Starting with the ITV merger, most of the ‘action’ took place before the deal was done. The heavily PR’d pre-merger posturing between media owner and agency representatives. This was bound to happen of course – not everyone is happy about a single ITV sales house representing more than 50% of TV advertising revenue.

However, now it is all done and dusted, the number of dissenters has significantly diminished. ITV plc is here to stay and grizzling about it would at best look like sour grapes and at worst, suggest that agencies don’t quite know how to handle it.

But at the moment, there is little sign of any rumpus to handle. The controversial Contract Rights Renewal pricing mechanism does not actually disadvantage any advertiser year on year. Those happy with their current deal will roll them over and be no worse off. Those unhappy with their current deal (and if the adjudicator does not find in their favour if they campaign to change it) can always use the ultimate sanction – and not advertise on ITV.

Choosing to not advertise on ITV is nothing new of course and ITV revenue dropped 4% year on year (Merrill Lynch). This set against an overall TV market increase of 0.8% in the year (AA Forecast Sept 2003).

Coincidentally, this occurred in the same year as substantial increases in ITV viewing. Partly the result of BARB finally reaching its full quota (the recruitment fiasco of early 2002 had some audiences reporting as much as 25% down year on year) and partly the result of some inspired programming – Richard Hillman bumped off a few Corrie regulars, the sycophantic Martin (Bashir) met the psychopathic Michael (Jackson)(allegedly) and the ITV executive who signed up the Rugby World Cup is going to have a few beers bought for them this Christmas. The net effect has been cheaper ITV in 2003.

ITV’s problems run a little deeper than a short-term price promotion can fix, so despite relatively attractive prices it was multi-channel and Five who witnessed the big revenue increases in 2003. Up 19% and 12% respectively (MediaTel: year to October 2003).

ITV merger aside, the effect of the 2003 Communications Bill has been massively underwhelming. The scramble for radio licenses faltered on the rock of Competition Commission and although pretty much anyone can now buy a TV station if they want to, no-one wants to.

The advertising market overall performed reasonably well in 2003 – at least it didn’t go down. Optimistic predictions of plus 3% year on year did not materialise though and we have had to settle for a more pedestrian plus 1% (AA Forecast Sept 2003).

For the most part this is the result of an economy ticking-over. Interest rates remained stable, as did employment levels, house prices crept up, and consumer spending remained healthy – the fact that most of the latter was on credit is a problem brewing for another time … and another government (allegedly).

The economic reverberations of the Iraqi conflict were muted and mostly realised in national press, down (2.4%) year on year (AA Forecast Sept 2003). A complication for a medium still affected by a financial and technological advertising slump in the quality titles. Of course, referring to them as broadsheets now is no longer strictly correct.

So was 2003 the experience we hoped for? Well, the only real noticeable changes may be a bigger TV company and smaller newspapers but it has been fun getting here. It’s taken a lot of time, money, effort and energy from a lot of people, but that in itself has been an experience, and as Oscar Wilde said “experience is the one thing you can’t get for nothing”.

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