ITV has room for manoeuvre with CRR

ITV has so far failed in its bid to see the abolition or radical relaxation of the Contract Rights Renewal (CRR) mechanism, but some observers say the broadcaster still has plenty to fight for.

The Competition Commission (CC) handed down a provisional decision stating that the CRR mechanism should stay in place in the interests of advertisers this week. But its consultation into the partial relaxation of the mechanism could see the widening of the definition of ITV1 to include an ITV1+1 time-shifted channel and ITV1 High Definition.

ISBA, the industry body representing advertisers, has so far welcomed the preliminary report from the CC.

Bernard Balderston, former Procter & Gamble associate director of UK media, says ISBA has always held the view that CRR would eventually need amendment to reflect changes in the marketplace such as the growth of multi-channelling.

He adds that while ITV may be disappointed that the relaxation of CRR does not go far enough, he does not believe the CC has completely closed the door to further changes. “The CC says it is open to considering ‘some variations’. This is an implicit invitation for ITV to come up with something smart,” says Balderston.

MPG managing director Paul Frampton also says that as the CC proposals stand, the inclusion of ITV+1 and ITV1 HD in the mechanism would be a positive step for advertisers and give them access to new audiences.

“This, together with the possible lifting of the ban on product placement, means ITV will have three new opportunities to raise revenue,” he says.

But Viacom Brand Solutions MD Nick Bampton says while he supports the CC for continuing to recognise the need for CRR, he questions the “compromises” proposed in relation to ITV1+1, HD and peak.

Bampton says: “This could lead to ITV strengthening their market power as a result of regulatory intervention which seems to be the reverse of what CRR was put in place to do in the first place.”

He adds that VBS is currently “reviewing what steps to take next”.

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

ITV is expected to shortly announce a new chief executive to replace executive chairman Michael Grade. Negotiations are reportedly under way with former BSkyB chief executive Tony Ball.