1997 Media Review
While the launch of Channel 5 could arguably be described as the most important media event of 1997, there were also other developments which caused big changes in the industry: Christine Walker left Zenith and later set up a joint venture with M&C Saatchi; WPP announced the formation of MindShare; Cordiant said it would be demerging its Saatchi & Saatchi and Bates businesses; Chris Evans bought Virgin from under the nose of Capital; Reed announced the sale of its IPC Magazines; and there was large-scale consolidation in the TV industry.
Advertising Industry Christine Walker’s exit from Zenith on 14 January was possibly one of the most surprising events of the year and, after a period of gardening leave, Walker announced that she would be setting up a joint venture with M&C Saatchi to be called Walker Media.
In September it emerged that WPP would be creating a new media outfit called MindShare from the Network and JWT’s media department. Having billings of over £8.7 billion, MindShare will be run by Dominic Proctor and Mandy Pooler and begin trading in January.
Television Industry Channel 5 launched on 31 March to a mixed reception – both actual and metaphorical. While some areas of the country still could not receive the channel, its opening launch night captured 5.8% of the prime time audience, with 2.6 million people tuning in to the opening show. In terms of revenue C5 brought in £9.6 million in its first full month on air and achieved a 2.9% viewing share. Agencies, while pleased with another channel for advertising, expressed some trepidation at the quality of the programming but the consensus was that 5 would take time to build into a major media force.
The TV company mergers which had been in the air for most of 1996 and the first half of 1997 finally took place in June when Granada bought Yorkshire Tyne-Tees for £711 million and STV snapped up Grampian for £105 million. The Granada move gave the Group, also comprising LWT, control of around 33% of ITV’s audience share and 11% of total UK terrestrial viewing, while STV gained a 94% share of Scottish commercial TV viewing and 6% of ITV revenue share.
It was also a big year for Channel 4, with chief executive Michael Grade leaving to join First Leisure. There was widespread speculation as to who would replace him, with David Elstein and Alan Yentob all being named as front-runners. In the end, the job fell to Michael Jackson, controller of BBC1.
Radio Industry Undoubtedly the biggest radio story of 1997 was the rumpus surrounding Virgin Radio. In May it was announced that Capital wanted to buy the station for £87m but the Monopolies and Mergers Commission expressed concern and undertook an investigation into the takeover.
Chris Evans, who had replaced Russ ‘n’ Jono as Virgin Radio’s breakfast show host, had different ideas and made an offer to buy the station from under Capital’s nose in December. Despite Evans’ £81m bid being below Capital’s, Richard Branson preferred the idea of the “Ginger Whinger” as owner of Virgin and accepted his offer. Capital put on a brave face and said it would not affect the launch of Capital Advertising, which opened its doors on December 1.
Xfm, the indie music radio station, was named as the new FM radio station for London and launched on 1 September. Agencies and listeners all appeared to welcome a station which catered for a niche market, though they were cautious to reserve their full support until RAJAR figures were released.
Press Industry The death of Princess Diana had a major effect on newspaper sales, with all titles experiencing increases during September. Broadsheets showed the biggest rises while tabloid sales were more subdued, perhaps as a result of the circumstances surrounding the tragedy.
There were a number of tweaks made to both of the Independent titles throughout the year, with a major new look revealed in September. Sales dipped in the middle of the year though there is evidence that over the last couple of months the revamp has attracted more readers. At the time opinion over the move was divided between “inspired” and “disastrous”. The Mirror also went through major changes at the beginning of the year though its sales have continued to show drops throughout the last eleven months.
There was continued speculation that Reed Elsevier was considering selling off its IPC Magazines business, and in October the plan was confirmed. It is likely that the buyer will be named soon – United News & Media and a management buyout team from IPC have been named as possible buyers for the £800m business.