ITV set to launch bid for Channel 4 Business

Its shares plunged nearly 30% last month when investors spooked the broadcaster to invest heavily in exclusive programming for a new streaming push.

It plans to combine its catch-up service ITV Hub and subscription service BritBox into ITVX, a new streaming player which it hopes will double digital sales to £750million by 2026. However, the move is expected to cost £180m over the next two years.

An industry insider said a takeover could bolster ITV’s finances by giving it more advertising-buying power and the ability to cut costs, while protecting Channel 4’s position as a public service broadcaster.

Among the changes, ITV could seek to merge the two channels’ back-office operations – such as bringing together their advertising and marketing departments – to free up more funds for content.

Such a decision could attract the attention of the Competition and Markets Authority, fearing that it could create a monopoly on television advertising and increase the prices of advertisements.

However, regulators are likely to be reluctant to repeat a 2009 decision to block Project Kangaroo, an attempt by ITV to create a streaming service with the BBC.

The Competition Commission argued at the time that it would give broadcasters too much power in the UK market, but their decision has since been widely criticized for giving Netflix a head start on UK streaming. .

Phil Smith, chief executive of the Incorporated Society of British Advertisers, said fears were already mounting over the potential costs of a much bigger TV advertising player.

He added: “A major concern of our members is the undue domination of the TV advertising market that could result.

“There are three TV sales companies – owned by Channel 4, ITV and Sky – involved in the buying and selling of advertising space. If they were to be consolidated, it would create undue dominance in the TV advertising market and reduce competition.”

The prospect of privatization has drawn criticism from celebrity supporters of Channel 4 who believe that its unique status as a public broadcaster funded by commercial advertising allows it to commission shows that no other channel would touch.

Monty Don, the TV gardener, said the organization should not be “unnecessarily lambasted” and Anneka Rice, the presenter, said: “What is the government doing?”

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This notice was published: 2022-04-05 18:51:32

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