OFT and Ofcom to review contract rights renewal

The Office of Fair Trading and Ofcom have said that they will conduct a review of contract rights renewal (CRR), the mechanism that prevents ITV from raising prices to advertisers to compensate for the loss of audience share.

The review is scheduled for early next year and the OFT says further information on how the process will be run will be published “when the review commences”.

CRR was introduced in 2003, when Carlton and Granada merged to create ITV plc, to protect advertisers from ITV’s dominant market position. But the broadcaster argues that it is unfair and referred it the OFT last year in a bid to get it scrapped (MW October 5, 2006).

ITV has welcomed the OFT announcement, saying in a statement: “We will be making the strongest possible representations to the OFT to conclude the processes within a year from now, giving advertisers and commercial broadcasters the certainty needed to contract airtime and plan levels of programme investment for the calendar year 2009.”

ITV’s share of national TV advertising revenues has dropped from more than 51% in 2003 to just under 40% this year.

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