Contract Rights Renewal: ITV, Ad Buyers Draw Battle Lines

19 May 2005

Britain's biggest commercial television operator ITV, born in January 2004 following a controversial merger between the nation's two largest networks, Granada and Carlton Communications, is reportedly asking media regulator Ofcom to jettison the Contract Rights Renewal mechanism.

The CRR was introduced by Ofcom following a tense standoff between ITV and UK media buyers, the latter fearing the newly formed giant would abuse its command of the terrestrial TV advertising market - of which it controls more than 50%.

Seventeen months on, the CRR is broadly deemed by most advertisers and agencies to have been an effective curb on anticompetitive practices by ITV.

However, on Wednesday the cat was well and truly tossed among the pigeons by a report in ad trade journal Media Week that ITV is lobbying for the scrapping of the CRR agreement in favour of one that takes account of its three - soon to be four - digital channels.

Such a move is bitterly opposed by organisations representing advertisers (the Incorporated Society of British Advertisers) and agencies (Institute of Practitioners in Advertising), both of which demand the CRR be retained until 2008 at earliest.

Avows one agency executive: "Agencies will fight it. There'll be blood on the carpet. I can understand why ITV want out of something that no longer suits it, but that's tough."

ITV, meantime, insists it has made no formal approach to Ofcom, adding that it accepts "CRR is a condition of the merger". Continues the media titan in silky tone: "We acknowledge, as Ofcom has acknowledged, that the situation needs to be monitored and that Ofcom is undertaking a review and we welcome that."

The sounds you hear in the background are the digging of trenches.

Data sourced from Media Week (UK); additional content by WARC staff