CRR May Destroy ITV Say Advertisers

Some of the UK’s biggest television advertisers have called for an end to the CRR, saying it is in danger of destroying ITV.

Procter & Gamble has called on Ofcom to consider the wider impact of the CRR, such as the exodus of advertising from ITV. Advertising revenues for the broadcaster are predicted to be down despite the World Cup (see ITV Ad Revenue To Tumble).

Last year the regulatory body planned to review the television trading system but decided not to. P&G associate director for UK and Irish media, Bernard Balderston, has called for the review to be reinstated, saying advertisers will regret the loss of the only channel able to take on the BBC.

ITV could lose close to half of its £450 million profit next year. This year around £160 million came out of ITV under CRR, with Channel 4 taking almost half that. The IPA recently accused other commercial broadcasters, particularly Channel 4, of strong arm tactics to exploit the CRR (see IPA Hits Out At ITV’s Commercial Rivals).

ITV stands to lose upwards of £150 million again under CRR in the next trading season, but with the television market expect to drop by 5% this year, the total loss could be closer to £250 million.

Despite recent declines, ITV1 still has more than 40% of all commercial viewing. However, it is understood that ITV has warned its advertisers that investment in programmes is unsustainable if revenues keep falling. Yesterday the broadcaster’s shares were down.

ITV: 020 7843 8000 www.itv.com