IPA responds to government on media ownership consultation

LONDON - The Institute of Practictioners in Advertising has told the government that, in the face of consolidation in the TV and radio industry, the structure of the sales industry was key to a free and competitive marketplace for airtime buying.

The IPA was responding to the Department of Culture, Media and Sport's consultation on media ownership. The advertising agency body said that its response has concentrated on sales structures leaving the business of actual ownership "to others".



In the face of probable ownership consolidation, the IPA suggests that there should be a minimum of four separate sales points in any single medium, or seven across media.



Where media ownership would result in a broadcaster exceeding 25% of sales revenues within a single medium (or 15% across media), the relevant owner should be required to operate that percentage of his sales above the 25%/15% limits through an independent sales company.



Jim Marshall, MediaVest CEO and chairman of the IPA Media Policy Group, said: "The industry has recognised that, while advertising is critically important to the funding of the commercial media, it is unrealistic to expect ad revenues to drive the government's policy of protecting diversity, programme content and plurality of opinion. Rather than seeking to have the advertising tail wagging the public policy dog, we have decided to press for guarantees of competition in that area of the market which directly affects us in advertising sales."



However, the IPA argues that if a current sales house already represents more than 25% of a market then it should not be forced to become smaller, but instead be prevented from getting any larger.



The IPA recommends a minimum of two London ITV sales companies until such a time as ITV falls to or below 25% of total television advertising revenue.



As for radio, a minimum of three commercial radio sales companies by area in the UK; while a minimum of two newspapers in key regions/cities of the UK is recommended for regional newspapers, except for those where one or none currently exist.



Finally, the IPA recommends a minimum of two poster contractors/sales companies in key regions/cities in the UK, except for those where one or none currently exist.



The government issued its consultation on media ownership document in November. In it, the government said that it would not remove regulatory hurdles blocking Rupert Murdoch from owning a UK terrestrial TV station, but will allow the creation of a single ITV company in its forthcoming communications bill.



The decision to block non-EU companies from owning a UK terrestrial broadcaster -- which could have seen international companies such Murdoch's News Corporation take control of ITV -- came just weeks after reports suggested that the government was considering giving media behemoths such as News Corporation and AOL Time Warner equal access to UK broadcasters.



However, the 50-page consultation document said that existing rules preventing non-EU companies from owning more than a 20% share of UK terrestrial broadcasters would not be lifted, although the government "would be willing to listen to arguments in favour of a repeal".



The UK government is to launch a public consultation later this month on relaxing media ownership laws, which could remove regulatory barriers preventing Rupert Murdoch from expanding into terrestrial television in the UK.



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