Annex
BSKYB'S PURCHASE OF SHARES IN ITV PLC
Voice of the Listener & Viewer (VLV) welcomes
the opportunity to comment on the implications of the recent acquisition
by BSkyB of a 17.9% stake in ITV PLC, and we applaud the OFT's
decision to launch an investigation into the implications of this
shareholding. VLV welcomes also Ofcom's decision to enquire into
whether the stake acquired by BSkyB alters the ownership structure
and control of ITV, within the framework of the 2003 Communications
Act, in ways that might in the end require Ofcom to reassess ITV's
licence.
In our view the implications for fair trading
and competition are not determined solely by the numerical size
of a shareholding, but by the ranking and character of the relevant
companies within the industry. ITV plc represents the consolidation
of more than a dozen regional commercial franchise-holders with
a history going back to the start of independent television in
the U.K. more than fifty years ago. BSkyB, apart from being a
substantial content provider and major publisher, has an already
dominant position in the area of distribution. VLV believes passionately
that media content is not just another product or commodity but
a key ingredient and catalyst within our culture and society.
1. THREAT TO
THE PLURALITY
OF NEWS
SERVICES IN
THE UK
VLV's concern focuses on the greater concentration
of media ownership that the BSkyB acquisition causes and its impact
on the plurality and quality of provision among television services
in the United Kingdom. The concentration of media ownership is
of particular importance in this instance because ITV is the owner
of Independent Television News [ITN] the parent of Channel 4 News
which has a distinguished half century of journalism behind it.
ITN is the only major player alongside the BBC and BSkyB's own
news operation, SkyNews.
Although Sky has given assurances that it will
not interfere in ITV programme decisions, there will be a conflict
of interest and might well be opportunities for subtle influence
when the ITV news contract next comes up for renewal. Sky News
was a close competitor on the last occasion. If Sky News chose
to undercut the ITN bid in order to win the ITV contract next
time, it might threaten the quality of Channel 4 News and news
provision on Channel 3 as a whole. Any such decline in the provision
of news could threaten not only the choice and quality of news
services available in the U.K., but also the plurality of sources
and therefore British democracy. If, in the interests of economy,
closer links between the news gathering and editorial teams of
the two companies were to be established, independence and choice
within news and information available in the UK could be significantly
affected.
2. THREAT TO
SERVICES FOR
THE NATIONS
AND REGIONS
OF THE
UK
ITV was originally created with an express purpose
of serving and representing the interests of viewers in the nations
and regions of the UK. BSkyB has no track record of this kind
of provision and we have concerns that if such programmes become
unprofitable in future, there could be pressures on ITV to make
further withdrawals from regional programme provision, on top
of those already sought by ITV and sanctioned by Ofcom. This would
be to the detriment of vital segments of the U.K. audience.
3. QUALITY AND
DIVERSITY OF
ITV OUTPUT
The Communications Act of 2003 laid obligations
on ITV, as a public service broadcaster not only in relation to
national/regional programme provision but more generally in regard
to the quality, range and diversity of ITV output and services.
As mentioned above, ITV has already applied to Ofcom for some
of these obligations to be lifted. Since BSkyB does not bear similar
obligations, we are concerned that as a major ITV shareholder,
it might seek or at least collude with a further erosion of public
service commitments.
4. DISCOUNTED
ACCESS TO
ITV'S PROGRAMME
ARCHIVE
ITV and ITN each have a rich archive of past
programmes, representing more than fifty years of production.
This valuable asset is currently being used by ITV, not only on
its main terrestrial service, ITV1, but also very successfully
to drive take-up of its new digital channels—ITV2, ITV3
and ITV4. Sky relies heavily on bought-in programmes and the viability
and future of these channels could be affected if Sky were to
obtain preferential rates for the use of these archive programmes
on its own channels. ITN also earns a significant amount from
its archive which could also be affected if Sky were to obtain
preferential rates for its use.
5. SUMMARY: CITIZENSHIP,
CHOICE AND
THE FUTURE
OF U.K. CULTURE
Voice of the Listener & Viewer (VLV) is
an independent, not-for-profit association which represents the
interests of listeners and viewers across the full range of broadcasting
issues. VLV is aware of, and concerned about the impact that broadcasting
and new media services have on democratic and cultural life. We
believe that a plurality of sources of news and information is
central to the democratic process, and to the development of an
informed and active citizenship. We have seen a significant increase
in cross media ownership in recent years and we believe that any
further concentration could imperil British democracy. In representing
the interests of British consumers VLV is also concerned to ensure
that adult and young viewers in the UK continue to have access
to a wide range and diversity of programmes which reflect and
embody British values, culture and environment. ITV has traditionally
provided this content which audiences greatly value. Sky, by contrast,
invests comparatively little in indigenous production. We have
concerns that the influence of a powerful new shareholder which
is also a rival for audiences, content and talent in an increasingly
competitive market, could threaten the future of this much-valued
provision.
January 2007
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