Ad Restrictions on ITV Maintained

LONDON: The U.K.’s Competition Commission is keeping the Contracts Rights Renewal (CRR) restrictions on how ITV sells its advertising time, as a result of the broadcasting group’s "unrivaled ability to deliver large audiences on ITV1."

The Commission has ruled that CRR undertakings are needed to prevent the channel from exploiting its dominant position "to the detriment of advertisers and other commercial broadcasters." The CRR undertakings allow buyers of advertising airtime to renew their existing contracts with ITV, adjusted to reflect the change in ITV1’s audience share. Audience share on time shifted and HD ITV1 channels can now be included in the CRR calculations. The CC has also renewed its call for an overall review of the system for selling TV advertising.

The Competition Commission’s deputy chairman and chairman of the CRR Review Group, Diana Guy, said: "Many participants have told us that the system of selling television airtime is far from perfect and we repeat our concerns, also raised in 2003, about the potential anti­competitive effects of ‘share of broadcasting’ and agency ‘umbrella’ deals between broadcasters and media agencies. We continue to believe it appropriate for there to be a wider review of the whole system for selling TV advertising."

ITV called the decision "damaging to the U.K.’s creative industries and fails to take account of the seismic changes within the U.K. television advertising market over the last decade." The broadcaster asserts that since the CRR introduction in 2003, investment in British content fell by £500 million between 2004 and 2008. In addition, ITV said, it and other British companies "are increasingly unable to sustain valuable public-service programming such as high-quality news and drama." This has limited the commercial sector’s ability to compete with BBC, ITV says.

Adam Crozier, chief executive of ITV, said: “Today’s ruling is out of touch and damaging for the interests of creative Britain. U.K. media is over-regulated and this has to change if we value and want to sustain a vibrant independent broadcasting sector that can rival the BBC and compete on a global stage. We do not have the option of appealing to the Competition Appeal Tribunal and Judicial Review only allows us a very narrow and technical recourse and it is unlikely therefore that we will use it. However, in our view today’s decision fires the starting gun for a broader campaign for liberalization to enable creative Britain and the enterprise media sector to compete on a level playing field against global competition in the digital age. Competition law and the regulation of the U.K. media sector require urgent modernization to take account of the public interest. A failure to address this will result in lasting damage to the UK’s creative industries and their reputation as global leaders in this field.”