ITV Wins Regulatory Review of Restrictions on Ad Sales

01 February 2008

LONDON: Since ITV plc became the UK's largest commercial broadcaster in January 2003 via the merger of Granada with Carlton Communications, there has been a large and painful thorn in its side.

Namely, the Contract Rights Renewal mechanism, imposed on the then new giant, to ensure its flagship channel ITV1 did not unfairly exploit its 50%-plus dominance of the national TV market. It is a set of constraints that tie the channel's ad rates to its audience numbers.

But five years is the equivalent of an eon in today's frenetic digital media maelstrom. And ITV1's market share has now shrunk to just under 40%.

CRR is seen as a "straightjacket" by ITV executive chairman Michael Grade who, since joining ITV in January 2007, has lobbied tirelessly for its abolishment - or at least dilution.

He argues that the number of households with access to Freeview and other multichannel services has grown faster than could have been foreseen in 2003.

And that ITV1, although still commanding the largest audience share among UK commercial channels, no longer dominates the national TV market. 

Following a recommendation last year by communications regulator Ofcom, the Office of Fair Trading this week began a review of the controversial CRR formula.

Not everyone agrees with Grade's anguished assessment. Especially Bob Wooton, director of media and advertising at the Incorporated Society of British Advertisers: "There is a clear case of dominance and that continues," he insists.

"Therefore, there is a continued need for intervention. It's easy for ITV to demonise CRR and say it's the root of all their ills. It's not, it's lack of previous investment in content and their brand."

Data sourced from; additional content by WARC staff