ITV Refers CRR To OFT

ITV has referred the Contract Rights Renewal, the measure put in place to control the broadcaster’s dominance, to the Office of Fair Trading in a bid to get it scrapped.

The OFT will have to decide whether or not there is a case for removing the CRR, which has since 2004 caused ITV1’s ad revenues to drastically decline. It is expected that the OFT will spend the next 10 weeks deciding whether it will launch a formal investigation.

This would involve other broadcasters, agencies and clients as well as Ofcom, with the strong possibility that it would result in a review of the entire TV trading mechanism, previously shelved by Ofcom, being put back on the agenda.

Despite attempts at boosting ratings with its autumn schedule (see ITV Wheels Out Big Guns For Autumn), ITV1 faces an ad revenue loss of anything between £100 million and £140 million in the upcoming trading season, with an estimated 10% fall in audiences (see ITV Ad Revenue Decline Expected To Continue In Q4).

ITV commercial director Ian McCulloch said: “Once people step back, I think they are starting to realise the long-term damage CRR is doing.”

The Incorporated Society of British Advertisers has defended CRR, but the likes of Procter & Gamble, the UK’s most powerful TV advertiser, has called for a review.

Some prominent agency figures, as well as TV sales bosses at Sky and Viacom, fear that the CRR system is contributing to a spiral of decline in the value of TV airtime and are believed to be shifting in favour of bringing in a new way of trading.

To read more about the CRR and its role for ITV (see ITV And The Role Of CRR In 2006).

ITV: 020 7843 8000 www.itv.com