OPINION: Single ITV Will Regret Failure to Get Support of the Ad Industry

Article excerpt

At long last some of the mist swirling around the Competition Commission investigation into the Granada-Carlton merger is starting to lift.

It is clear now that the two ITV companies are relying on 'behavioural', rather than structural, remedies to get their way. Their big ideas, unveiled to the Commission last week, focus on the way ads would be sold by a united ITV.

The suggestion is that TV advertising currency should be made more transparent by tying it in more explicitly to programme ratings than net advertising revenue. Produce a good schedule and you get rewarded. Offer crap and you pay the price. There will almost certainly also be a code of practice in there somewhere, probably to be monitored by Ofcom.

Without knowing the details of the Granada-Carlton proposal, it is impossible to judge its weight. But at first hearing it sounds a rather puny weapon with which to take on the assembled might of a Commission panel that includes business and accountancy professors, two former senior Department of Trade and Industry civil servants and a senior lawyer.

The two ITV companies have in effect been forced to rely on trying to reform advertising market mechanisms, because more structural remedies have failed to fly. The firms were prepared to offer up a sales house and float Carlton Sales free. The Commission, however, was convinced that the 'independent' sales house would be like the runt of the litter, unable to offer much real competition.

Likewise, a Commission suggestion - that banning share deals might do the trick - was opposed by the advertising industry because it quite likes getting discounts for a guaranteed share of marketing budgets. …