CRR restricts how much ITV can charge for advertising. ITV accepted CRR undertakings in 2003 to deal with advertisers’ concerns that the merger of Granada and Carlton would create a monopolistic position in the TV market.
The DCMS says the way in which television airtime is currently sold has a “significant influence” on the need to retain CRR. The Department adds that if it were removed, there would be “greater confusion and complexity” in determining how much money goes to ITV in comparison to STV, UTV and Channel TV.
The government announcement was in response to the House of Lords’ Communications Committee report into the regulation of television advertising, published in February.
The House of Lords Committee recommended CRR should be replaced with “binding undertakings” from ITV to invest an appropriate proportion of any additional revenues from advertising into creating UK-originated programming and trading.
However, the DCMS says the removal of CRR would result in higher prices, meaning advertisers could cut back and in turn decrease broadcasters’ ability to produce UK originated content.
The DCMS added it would endorse Ofcom’s wider review of the TV advertising market, announced last month – despite the Lords saying the review should be conducted by a smaller, more independent panel.
ISBA’s director of media and advertising Bob Wootton says: “We welcome this response. The views of advertisers have clearly been heeded and understood. We look forward to playing a full and active part in the forthcoming review, itself the next stage in a long-running process.”