Friday, May 02, 2014

Selling England By The Pound

Perhaps it's not what Genesis had in mind when they coined their eponymous album, but with the sale of Channel 5 to Viocom, another UK media business becomes foreign owned.

It is quite extraordinary that a country that produces a large proportion of the world's most popular media is unable to grow or support any commercial world class media businesses. ITV is the only company that comes close, but apart from owning a couple of overseas production houses, it is quite a parochial business.

Our biggest indies are almost all owned by American media companies or US VCs. Think Shed, Shine, All3, Zodiak, Tinopolis. A handful are owned by European or Australian businesses. The UK's main cableco and satellite broadcaster are both American (Fox' Sky and Liberty's VirginMedia).

In the meantime the UK is home to one of the world's largest financial communities. Yet this does not seem to turn into the ability to finance world level media companies, despite tax breaks and incentives. The problem is that we have a weak second tier public market and few native media VCs or private equity houses of scale. But the real issues are the dominance of public sector broadcasting, an over-regulated market for fundraising, lack of retail involvement in funding medium sized media companies and, perhaps, a lack of media moguls who want to take on the world. 

You might ask "does it matter ?". In the global marketplace we live in, perhaps it doesn't. But it is worrying that anyone wanting to develop a serious media idea or business needs to jump on a plane to seek funding and patronage.

And all of this begs a second question: why did N&S sell its TV channels whilst hanging onto its print and porn empire ? Maybe British media hasn't changed so much after all...