Magazine article Marketing

OPINION: Carlton and Granada's Gloomy Outlook Augurs Well for Merger

Magazine article Marketing

OPINION: Carlton and Granada's Gloomy Outlook Augurs Well for Merger

Article excerpt

Only vague hints have emerged so far about the merger case Carlton and Granada have submitted to the Office of Fair Trading.

Naturally such documents are commercially confidential and anyway it is almost certainly counter productive to try to bounce the OFT into a decision with a public campaign. But there could be another reason for the confidentiality and the resolute 'no comments' - the bleakness of the ITV case.

The two firms will plead such abject poverty that only permission to create ITV plc could possibly help. Luckily they will not have needed to rely heavily on the imagination. The facts, and the trends going forward, are grim enough.

The first thing to do, of course, it to argue about the definition of the market. TV advertising is much too narrow a concept and the fact that ITV holds more than 50% of it could create a misleading impression.

Let's look at the entire market for display advertising. That's much more promising. ITV has only between 15% and 17% of that market. How could anyone get hot under the collar about such a modest share.

But should the OFT insist on focusing on TV advertising, then all is not lost here either. It is a little unfortunate that despite everybody's best efforts the share of ITV advertising has remained stubbornly above the symbolically important 50% level. The OFT should not be misled by this unfortunate detail. The trend is very positive - all the way down.

And while it may just scrape in at 52% by the end of the year, there are real grounds for confidence that by next year it will be safely under 50%. …

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