“CRR needs to change”

ITV’s Contract Rights Renewal (CRR) needs to change, according to some of the panellists at last week’s MediaTel Group ‘Future of Television’ seminar.

Speaking before the second panel at last week’s event, Andrew Smith, head of TV at Billetts, said that on the whole “CRR has worked but it has its flaws and needs to change”.

“2009 is the watershed year for TV – it’s going to be about change. CRR definitely needs to change as ITV is in a dire place, with revenues barely able to cover its £1 million programme budget,” he said.

Chris Hayward, head of investment at ZenithOptimedia, added: “CRR has been a protective measure to some extent, however, it’s a fag packet remedy and it is flawed.”

However, Viacom Brand Solutions’ managing director, Nick Bampton, feels that CRR has failed as a defence against ITV price inflation because of low ratings and more choice in the market.

“CRR came about because no-one wanted the [Carlton and Granada] merger – it was a remedy proposed by people in ITV, but it hasn’t been a success because ITV hasn’t performed well in terms of audience,” he said.

“CRR has upheld and increased ITV’s premium in the market, which stands at 50% compared to others,” according to Bampton.

“ITV still has an extremely dominant position in the market, so if the choice is CRR or a watered down version, we should stick to CRR,” Bampton concluded.

However, panellist Ray Snoody disagreed: “The world has changed and so should CRR. Advertisers should wake up to their best interests.”

After the seminar, Bampton called for regulators to undertake an annual “school report” of ITV’s trading policies as an alternative if CRR has to be removed.

Last month, the Office of Fair Trading (OFT) recommended that the Competition Commission relax ITV’s CRR (the mechanism that protects advertisers from ITV abusing its dominant position in the UK TV ad market), saying “ITV’s position has changed and so has the wider market” (see OFT recommends relaxation of CRR).

At the time, OFT’s chief executive John Fingleton, said: “Our provisional view is that we should recommend to the Competition Commission relaxation of the CRR undertakings, whilst retaining safeguards for advertisers and media buyers.”

The OFT is currently going through a consultation period, which is due to end on February 27, before formally advising the Commission.

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