ITV companies join forces to sell abroad
Television: International sales link-up may be first step to further consolidation
Wednesday 05 July 1995
ITV companies Granada, LWT and Yorkshire Tyne-Tees are to combine their international sales forces to sell television programmes abroad.
The companies are responsible for some of the UK's most popular programmes, including Prime Suspect, Cracker, Heartbeat and Poirot.
The move creates the largest overseas television sales group in the UK after the BBC, and will lead to significant cost savings, according to the companies involved.
"ITV has to grow much stronger to compete with the big international players, and real strength will come from marketing the concept of UK independent television," said Bruce Gyngell, group managing director of Yorkshire-Tyne Tees. "Our new sales arm is the first major step in this direction."
Mr Gyngell, former head of TV-am, is to be the first chairman of the new sales house, which will be up and running in time for the major TV trade fair in Cannes in October.
Other companies may yet join the consortium, including Anglia Television, owned by Lord Hollick's financial and media conglomerate MAI.
The companies involved to date sold programmes worth about pounds 20m internationally last year, a figure they hope to exceed through the joint venture. By comparison, BBC programme sales were pounds 81m in 1994.
Ward Thomas, Chairman of YTT and the prime mover behind the joint sales house, said the companies would be able to cut marketing costs significantly: "We won't have to send four different teams to Cannes, and put them all up at the Majestic."
The move to a common sales front comes in the wake of criticism that the commercial sector has become fragmented and that it lacks a common vision - a view that some ITV chiefs accept in private. At the same time, advertisers have criticised the high prices charged for airtime, at least pounds 1.5bn a year, despite lower ratings in recent months.
ITV has responded with promises to spend more on programming - about pounds 5m more, according to information provided to the Independent - and to bring blockbuster films forward in the schedule.
The joint international sales scheme may help to deflect the mounting criticsm. By working together on other marketing fronts, including licensing and merchandising, the companies hope to forge closer ties that might help to improve programming across the ITV network.
Mr Thomas suggested that joint international selling was just the beginning and that further consolidation was inevitable. "You certainly don't need 15 managing directors with chaffeurs and secretaries, to run ITV," he said.
Ironically, his own company is currently the target of bid speculation, although neither MAI nor Granada, each of which have have significant minority stakes in YTT, would be allowed to mount a full bid under the rules governing media cross-ownership.
Mr Thomas said he had not been approached by any interested party. Recent visits to shareholders and analysts to discuss company prospects might have been behind the recent rise in the share price from around 500p to yesterday's close of 586p.
The company's share of national advertising might rise to about 11 per cent for the year 1995, compared to under 10 per cent a year earlier, he said; cost-cutting in 1993 and 1994 was beginning to flow through to the bottom line.
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