The Communications Committee, chaired by the Earl of Onslow, will investigate regulatory changes that are currently under discussion such as product placement, rules on scheduling and sales of advertising.
The Committee plans to pay particular attention to the Contract Rights Renewal (CRR) process. In May, the Competition Commission ruled that existing CRR rules on how ITV sells its on-air advertising would remain in place, but signalled that they could be scrapped if a full review of the TV market was called.
The Committee will also look into how much the decline in television advertising was brought on by the pressures of the economic recession and the migration of advertising to the internet and other media.
It is inviting written evidence from the industry on appropriate levels of regulation, the financial impact of any changes if product placement is introduced and how much the commercial public broadcasting sector would be affected if the CRR rules were reduced or removed.
Supporters of CRR say that ITV still retains a dominant position in its command of commercial impacts and audience ratings. Chris Locke, trading director at Starcom MediaVest Group, says: “Ofcom and the CC look at this regularly, consulting with all interested parties, and, to date, nothing they have seen warrants any changes to CRR.”
He argues that there is no evidence TV is losing revenues to the internet or additional monies going into video-on-demand coming from TV budgets.
“Frankly we don’t need another body looking into this – it is more than covered regularly elsewhere.”
ITV is set to reveal interim results next week and it has seen a revival in ad revenues in recent months. However, it maintains that the media landscape has changed dramatically since the introduction of CRR in 2003 and the remedy is no longer relevant.
The Earl of Onslow says: “The advertising-funded broadcasting model has served public service broadcasting well. It is important that, as the media develop, the regulation of television advertising adapts to the times and that the right regulations are in force for the benefit of the industries as well as for the public.
“In this inquiry we want to see how potential regulatory changes and the increasing competition from the internet and other media might affect commercial broadcasting. CRR has significant commercial implications for the sector and will form an important part of our discussions.”