Allen isn’t giving us the full CRR picture

Television is rather ill, (but) it is not dead, pronounced one of Britain’s biggest advertisers at the recent Royal Television Society conference. Alan Rutherford was thinking of how his own company, Unilever, had trimmed global television spend by 20 per cent as it struggles to come to terms with multi-channel platforms and the internet.

No sooner had he spoken than startling if bizzare evidence that the patient is not dead yet became apparent. ITV chief executive Charles Allen made a proposal so breathtaking in its audacity that it momentarily stunned the normally unshockable advertising community. His suggestion? Scrap the contract rights renewal remedy (CRR) forthwith; it doesn’t work and more importantly, it is doing irreparable damage to ITV1.

Now, while many of the finer details of CRR remain to this day cloaked in profound mystery (as many advertisers would privately admit), certain skeletal facts are inescapably clear. One is that the system has only recently been introduced, so calling for its abolition might seem a little premature. The second is that the prime mover in its introduction was none other than Allen himself, desperate as he then was to appease criticism (from most of the ad community) of the Granada/Carlton merger.

Leaving aside the possible charges of self-serving hypocrisy and double standards now he has got what he wants, we should nevertheless ask whether there is any merit in Allen’s demands. What he says about there being no such restraint anywhere else in Europe, and the BBC having a particularly strong year are certainly true. Equally, they are irrelevant to the argument, since Britain’s TV ‘ecology’ is unique and if the BBC is so strong, that strength is in no small way being helped by ITV1’s own dismal ratings performance.

Let’s look at that argument from another point of view. Who would benefit from CRR’s abolition? Well, ITV certainly – as there is a projected loss of &£150m revenue in 2006. And who knows what the next trading year holds as the multichannel world gets more of a grip? Strangely, though, the case for abolition is a lot less compelling when applied to advertisers.

Let’s first dismiss a red herring: that CRR is no longer relevant as the lack of complaints to the adjudicator demonstrates that ITV has mended its ways and is now in perfect harmony with advertisers. The reason why the adjudicator has been so idle is that few clients, or agencies, dare to alienate what is still the dominant brand-building medium.

Moreover, while it is true that ITV1 hasn’t been having a very good year, as Phil Georgiadis points out, add its performance to that of ITVs 2 and 3 and you get 41.5 per cent of commercial impacts and 93 of the top 100 rating programmes this year – a rather different perspective on the multi-channel revolution allegedly ravaging ITV the brand.

Take away CRR and the trading distortions caused by agency deals would be exaggerated, favouring scale over specialism and buyer over planner. Worse, ITV would be able to return to its old gravity-defying trick of rewarding itself for poor performance by means of ‘media inflation’.

So, nice try Charles, but it won’t wash; all the more so given the &£135m you have already managed to pocket on behalf of shareholders, through savings on ITV’s broadcast licence fees

Stuart Smith, Editor

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