Bailey: Ownership rules unfair to traditional players
By Leah McBride Mensching, Monday 26 May 2008 at 19:47 :: Media Ownership :: #1699 :: rss
Media ownership rules in the United Kingdom are unfairly heavy-handed on traditional players like newspapers, while the digital companies they have to compete with, especially Google, are free to do – and grow – as they please, Trinity Mirror's chief executive has said, The Sunday Times reported.
Google and other digital rivals do not fall under the rule of the 2003 Communications Act, which has strict ownership and market share rules down to the local level, and traditional media are increasingly feeling the sting as digital companies go unregulated, while they are powerless to fight back, Sly Bailey told the House of Lords communications committee last week.
“I am not arguing that they should be regulated more, I am arguing that we should be regulated less,” she said, according to The Sunday Times.
Without the 2003 Communications Act to hold it back, Google's UK income is set to exceed ITV in 2008, and total Internet ad spending is on track to overtake the entire television sector in 2009. It currently commands half the £3 billion online ad market in the United Kingdom, and is expanding at 30 percent a year, The Sunday Times reported. Meanwhile Trinity Mirror had to close eight newspapers in Peterborough and Derby earlier this month, and could not sell them to regional and local newspaper publisher Johnston Press because competition authorities believed the sale would break media ownership rules.
These heavy-handed rules imposed on the newspaper industry, while online competitors only encounter “light touch” regulations, could mean the end of the newspaper industry, Bailey said.
“By the time the authorities wake up and realise the gravity of the situation it might be too late,” she said, according to The Sunday Times.
Michael Grade, ITV chairman, agrees with Bailey. When his company merged in 2003, it held 51 percent of the television advertising market. It now has 45 percent, including all of its digital channels. Meanwhile, Google's UK share of online searches has grown from 57 percent in July 2005, to 81 percent in April 2008, according to Nielsen Online data, The Sunday Times reported.
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