Ofcom investigation on BSkyB/ITV: BECTU comments

8 March 2007

1. BECTU is the trade union for workers (other than performers and journalists) in the audiovisual and live entertainment sectors. We are a recognised trade union within ITV plc; we have a significant number of members in BSkyB; and we have an extensive membership throughout the rest of the broadcasting and independent production sector. We submitted comments to the OFT during its recent investigation and we have a continuing interest in this Ofcom investigation.
2. Following the OFT's intervention, we note that the Secretary of State for Trade and Industry has asked Ofcom to investigate whether BSkyB's acquisition of a 17.9% shareholding in ITV raises public interest issues in the area of plurality of control of media enterprises.

A reduction in media pluralism

3. BECTU's view is that there are strong public interest concerns about the reduction in media pluralism arising from this case. We note the following relevant points of concern supporting this conclusion:
   • BSkyB is 39% owned by News Corporation, which also has newspaper interests amounting to 32% of total UK weekly newspaper sales. This is, in our view, a degree of concentration of media ownership that is already excessive - not just on economic grounds but also on democratic and cultural grounds. A further extension of New Corporation influence into ITV would be highly undesirable.
   • The merger would allow BSkyB privileged access to ITV strategic policy thinking in areas of direct commercial interest to Sky, for example: news supply; Freeview and Freesat; bidding for sports and film rights; the TV advertising market (noting that BSkyB and ITV between them control over 50% of the market); the ownership and any future disposal of production assets.
   • Specifically in terms of Freeview, BSkyB has a direct interest in promoting its primary model of subscription TV as a direct alternative to the free-to-air model of Freeview.
   • More generally, influence on ITV's multichannel business would offer a potentially valuable source of cross-promotion and complementary scheduling for Sky's own channels, which are no longer as dominant as they were.
   • Without having any brief for ntl (now Virgin Media), we can only note that the effect of BSkyB's ITV share acquisition was undoubtedly to block ntl's own bid for ITV, which could potentially have resulted in a cable/ITV alliance offering a greater commercial challenge.
   • We also note the current dispute between BSkyB and Virgin Media, on a purely corporate matter, which has caused great inconvenience to viewers left with no alternative access to popular programmes.

News supply

4. On news supply, we are already concerned about the implications of recent trends affecting ITN, including the loss of the news contract for Five to BSkyB and the closure of the ITV News channel. BSkyB's acquisition of a significant ITV stake would have clear implications for the forthcoming discussions on the ITV news contract - with the ultimate fear that it would be awarded to BSkyB.
5. We are in distinct danger of moving from a system of 3 major news providers to just 2 (BSkyB and BBC) - with a potentially detrimental affect on our pluralist democracy. This is especially significant in the light of News Corporation's newspaper interests and the overtly right-wing rather than impartial agenda of Fox News in the US.

Conclusion

6. For the reasons set out above - all of which point to actual or potential reductions in media pluralism - we believe that BSkyB's acquisition of ITV shares raises strong public interest concerns. We have a completely separate and extensively documented list of concerns about BSkyB as an employer - but we accept that these fall outside Ofcom's specific remit in this investigation.
7. We believe that the public interest concerns in this case are sufficiently strong as to require BSkyB to be required to withdraw from its ITV shareholding. We hope that Ofcom will recognise the strength of these concerns and we look forward to the outcome of this investigation.