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Last Updated: Tuesday, 7 October, 2003, 10:33 GMT 11:33 UK
Q&A: ITV merger
The two biggest companies in the ITV network, Carlton and Granada, have gained approval for their proposed merger which they hope will revive their fortunes. But what difference will the merger make to their business prospects and to viewers?

What will the merger mean for viewers?

Better programmes - in theory.

The merger is intended to free up more money to plough into the schedules because better programmes bring in more viewers, which brings in more money from advertisers.

For Granada and Carlton to get out of their financial rut, they must produce shows that are watched by a lot of people. If shows are popular, advertisers are more willing to let go of their cash.

Why did the two companies want to merge?

ITV has been losing market share to other channels, particularly cable and satellite stations.

And its financial position was further weakened by the collapse of its ITV Digital venture last summer, with huge losses.

A merger could harness the power of the network, which still garners 50% of all advertising revenue.

And the companies say they would save at least 50m a year by avoiding duplication.

Why did the government approve the merger?

The government is keen to encourage a "world-class" broadcaster to emerge that can challenge the BBC and BSkyB both in the UK and abroad.

It recently changed the rules under which ITV is governed to allow such mergers in principle.

It also wants to encourage more foreign investment in the UK media industry.

However, it did announce certain safeguards to protect the advertising industry from being over-charged.

Will the merger prevent ITV being taken over by a US media company?

No. A new law allowing non-EU companies to buy into ITV will come in to effect at the end of this year, and will still apply to the new company.

US media giants like Viacom and Disney could see ITV as a good way to move into the UK market - if the price is right.

And other foreign bidders are also interested.

Does it mean the regional ITV companies will disappear?

No. Each UK region will still have its individual broadcasters - such as HTV, Tyne Tees and Border. They will continue to provide regional news and regional programming.

It just happens that Granada and Carlton own 11 of them, which would become part of the new company.

The new company says it wants to develop strong local and regional news programmes.

And safeguards have been put into place to preserve the interests of the smaller regional operators in Scotland, Northern Ireland, and the Channel Islands.




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