Competition between Television Companies for Advertising Revenue in the United Kingdom: The Independent Television Regions Prior to Deregulation

Abstract

This paper provides a contribution to the geographies of advertising and the media. The authors examine the ways in which commercial television companies try to attract advertising to their regions; advertising being their main source of revenue. Competition based on the cost of advertising in particular regions is effectively restricted. This market failure results in regionally uneven allocations of advertising money, and hence an uneven regional pattern of TV company revenues. Other forms of competition are used to attempt to change this. TV companies promote their regions to advertisers and advertising agencies in ways varying from the production of ‘hard’ data to full-blown campaigns designed to promote or alter regional ‘images’. They also provide various services and cost incentives. It is argued that the deregulation of commercial television, which introduces intraregional competition, will not correct the market failure and will, if anything, reinforce the uneven allocation of advertising monies and media revenues. It is also suggested that intraregional competition will reduce regional promotion, the main competitive strategy that has been used to try to offset regional differences.