CRR to remain for ITV but will be loosened

The Competition Commission has today (September 15) launched a consultation into the partial relaxation of ITV1’s Contract Rights Renewal mechanism.

Competition Commission
Competition Commission logo

It has also handed down a provisional decision stating that the mechanism stay in place for the interests of advertisers and the media agencies that negotiate with the broadcaster on their behalf.

Among the changes the CC is proposing is widening the definition of ITV1 to include an ITV+1 time shifted channel and ITV1 High Definition.

The CC is now inviting interested parties to comment on the provisional decision and suggest possible changes to the mechanism. Written submissions will be accepted until 6 October.

Diana Guy, CC chairman and chairman of the CRR review group says that while ITV1 has seen a decline in its share of both viewers and ad revenues since 2003 when the mechanism was first introduced, as a precondition of the merger between Carlton and Granada, the broadcaster remains crucial for advertisers wanting to reach a large audience.

“We found that if they [advertisers] significantly try to reduce their proportion of expenditure on ITV1 they could be faced with significantly less attractive terms for their remaining ITV1 business.

“Because of this the changes in the market since 2003 have not increased the bargaining strength of agencies. It is therefore our view that the remedy needs to stay in place.”

The CC plans to publish its final decision by the end of the year.

Meanwhile, ITV is expected to shortly announce a new chief executive to replace executive chairman Michael Grade (pictured), who has lobbied hard against the restrictions posed by the CRR mechanism.

Former BSkyB chief executive Tony Ball has been widely tipped to take up his position.

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