Clear picture needed for Scottish media after ITV merger

0 Comments | Sunday Herald, The, Oct 13, 2002 | by Darran Gardner

THE future shape and size of the ITV network is still looking a little fuzzy.

Despite Carlton Communications' boss Gerry Murphy saying last week that the company and fellow ITV giant Granada were "relieved and excited" that merger talks were under way again, there are still many questions which need to be answered.

There is certainly no doubt that in the middle of the worst media recession in a decade a certain lack of clarity has left both industry veterans and viewers confused.

Yesterday's debate in Edinburgh on Broadcasting, Scotland and the Communications Bill organised by the Voice of the Listener and Viewer (VLV) - a body which represents consumer interests in broadcasting and works for quality and diversity in the industry - was designed to bring into focus some of the issues relevant to Scottish viewers.

With the government's Communications Bill expected to be introduced in the Queen's speech in November and debated in the upcoming parliamentary session, its role in restructuring and reinvigorating the British media remains a subject of great speculation.

Following the July release at of Lord Puttnam's joint committee report on the draft bill, issues such as media plurality, diversity, competition and regulatory control, have been central to discussions on the future of UK broadcasting.

Joining media experts such as Jeremy Mitchell, who represents Scottish interests on the Broadcasting Standards Commission, and Mark Leishman, the newly appointed BBC policy head for nations and regions, were industry figures such as Scottish Radio Holdings' chief executive Richard Findlay and SMG Television CEO Donald Emslie.

A desire to protect plurality and diversity was the main thrust of Emslie's speech at the event, with the SMG executive outlining the rationale behind his argument that the identity of commercial television in Scotland would best be preserved if SMG Television - which owns the Scottish TV and Grampian licences - was not lost in the consolidation of ITV.

The media company, he argued, was supportive of Granada and Carlton's plans for a merger (both currently operate ITV licences in England and Wales) but Scottish TV and Grampian could exist independently within a restructured network as ITV Scotland.

With the English media giant apparently "comfortable" with SMG's ambitions, Emslie said that it was still possible for the Scottish TV assets to properly serve local viewers and retain a strong network presence.

"Our argument is that Scottish TV and Grampian can exist outwith a merged ITV system. The reason we can exist is that the network is a federation, and the network agreement is such that everyone pays fees on a proportional basis and there are agreements related to production, transmission and scheduling. These agreements are still part of a merged ITV.

"If Scottish TV and Grampian stopped supporting their local areas and local advertising, then local people would stop watching. That would create problems with ad revenue."

SMG Television's ability to safeguard its regional credentials (which include licence production agreements of 636 hours of Scottish TV programming and 365 hours for Grampian) and opt in to prime network programming are linked, added Emslie, to its ability to grow regionally and nationally. Currently SMG is concerned that regulatory changes will allow consolidation among national media players, but block the same process at a regional level.

Although SMG remains a regional and a national business, its desire to bulk up and improve economies of scale (already achieved with the consolidation of the Scottish TV and Grampian operations) has not been dented by its (pounds) 400 million debt burden. And while it is selling its publishing business, it retains an interest in acquiring Scottish Radio Holdings, which it holds a 29.5% stake in.

Although it remains unclear exactly what the role new media regulator Ofcom will take in helping ensure that SMG can "build scale and viability", Emslie said that a balanced framework involving competition and content would guarantee regional diversity and allow SMG Television to properly cultivate its independent producer status for the BBC or Channel 4.

"We need a competitive edge and regulation that companies adhere to in a grown-up way. If we understand the relationship between licence owners, community and capital controls, then those who spread the doom and gloom about the death of regional TV will be wide of the mark.

"We are currently going through the worst industry recession I have ever known, but there are signs that it's bottoming out. If you look ahead to 2004-2005, the forecasts are for ad revenue to grow. Fundamentally, ITV is still a fantastic business to be in."