Nightmare on Media Street
Dignam, Conor, Marketing
A freedom to build cross-media empires is the holy grail for wanabee moguls. Conor Dignam looks at the consequences
The vision of a nightmare future, in which a handful of media moguls control a monopoly of television, national newspapers and radio, is haunting advertisers and media buyers as they confront the prospect of changes in the current cross-media ownership regulations.
National Heritage Secretary Stephen Dorrell is considering a change to the 1990 Broadcasting Act, which prevents key sectors of the UK media from ownership of other media. A Government white paper on the issue is expected in the next two months.
With the development of multi-media technology, and the increasing convergence of different media, it seems inevitable the legal framework around media ownership will change.
But the Government is being cautious, largely because politicians don't like or trust the media. Ownership of television and newspapers has traditionally been seen as too potent and potentially dangerous to be left to a deregulated market.
Concern over cross-media ownership is shared by advertisers and media buyers - who fear it could cost them more to buy television airtime or space in a newspaper - if one company owns and controls both.
Media monopolies hold the prospect of conditional selling, restrictive practices and a "take it or shove off" basis of setting the cost of advertising.
Zenith Media Worldwide's chief executive, John Perriss, who chairs the Institute of Practitioners in Advertising's media policy group, says that questions of ownership are less important to media buyers, agencies and clients than the sales arrangements and market share of media owners. "What is far more sinister than ownership across a range of media is undue dominance of one media owner in particular market areas," he says.
Perriss points to the Mirror Group's [pounds]50m acquisition of a 19.9% stake in Scottish Television last year as the kind of cross-media trend advertisers and media buyers would be worried about.
The Mirror Group already owns two of Scotland's strongest newspaper titles, The Daily Record and Sunday Mail. The obvious concern among advertisers would be a Scottish Television controlled by the Mirror, which might force advertisers to take space in its papers if they wanted access to air time.
Perriss admits existing regulations concerning media ownership are out-dated and need change, but says fair trading laws and anti-monopoly legislation will have to be rigorously applied in their place. He says it would make more sense to stop owners taking more than a 25% media market share in the same area than impose the 20% share limit on ownership.
John Hooper, director general of the Incorporated Society of British Advertisers, which has submitted a report to the Department of Heritage, backs the relaxing of some ownership restrictions, but believes others should stay.
"We would be opposed to any significant concentration of ownership in terrestrial TV. We don't believe any company should own more than two licences. That wouldn't be healthy for the media or advertising industries."
Hooper said ISBA hoped relaxing media regulations would bring more people into the market - encouraging the growth of new media in both broadcasting and newspapers. "We want any legislation to encourage growth in the media market, rather than just allow a few companies to dominate it."
But Georgina Hickey, deputy media director for Carat International, says the road to deregulation might not necessarily mean worse market conditions for advertisers. "It's not as simple as saying if one company owns a range of media you will automatically get conditional selling. In Italy for example, where Silvio Burlusconi owns a daily newspaper, magazines and TV networks, advertisers actually get very good prices across the media, because Burlusconi's approach is that each medium is separate and they're all prepared to negotiate rates. …