David Prosser: Not much of a welcome for ITV's new boss
Wednesday 16 September 2009
Outlook First, an apology. Contrary to the impression given by this newspaper and all others, ITV is not the sick man of broadcasting, brought low by a combination of the recession and poor programming. No, it is the dominant force in commercial broadcasting today, able to trample all over advertisers who cannot do without it – unless, that is, a powerful regulator intervenes.
That, at least, is the picture painted yesterday by the Competition Commission, as it rejected the case for abandoning the contract rights renewal regime that has prevented ITV using its dominant position to exploit advertisers since the merger of Carlton and Granada in 2003.
This is one of those cases where you can pick your statistics to suit your argument. ITV points to the explosion of digital television over the past six years, which has seen the number of households with multi-channel viewing facilities more than double. With all those new competitors, ITV points out that its share of television advertising revenue has slipped from 48 per cent to 36 per cent since 2004.
The Competition Commission doesn't dispute those figures. But it is more interested in other data, such as ITV's 90 per cent plus share of mass audience programmes. It is impossible to mount a large-scale television-based advertising campaign targeting a number of crucialdemographic audiences without using ITV, the Commission says.
The ruling is undoubtedly a blow to ITV (and to other commercial broadcasters, which tend to set their advertising rates at a discount to ITV's charges). Not only will the continuation of CRR make it tougher for ITV to raise its rates, but the Commission's report is also effectively a sideswipe at the way the company has been managed – with these sort of advantages, results should have been better.
There will now be a continued period of discussions between ITV, the Commission and other interested parties. But a deal looks out of the question before the crucial negotiations over 2010 advertising campaigns begin.
Nor will Michael Grade, who could set a finish date as early as this week, bequeath his successor at ITV a more benign regulatory environment – one of the objectives he has been working towards throughout his three years at the helm.
All very disappointing. ITV's new boss certainly has his work cut out. Maybe that's why the broadcaster has taken such an age to find the right candidate. The delays can't be down to any lack of competence within ITV (despite all the public backbiting over certain candidates). That's not the sort of company the broadcaster is, the Competition Commission said yesterday.
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