ITV highlights costs of ad rules

04 November 2010

LONDON: The chairman of the UK's largest commercial broadcaster has called for a change to regulations brought in to protect advertisers.

ITV chairman Archie Norman said that a change to the rules would lead to greater investment in arts, drama and factual programming.

Addressing the House of Lords Communications Committee, Mr Norman and chief executive Adam Crozier, said that ITV had been driven into a "ratings rat race" and levelled most of the blame at the contract rights renewal measure.

Introduced in 2003, the measure was designed to protect advertisers from the impact of ITV dominance.

It established a direct relationship between the channel's overall audience share and how much advertisers pay for media space.

The lower the ratings, the less space costs - meaning that the network has to maximise viewers in order to boost ad revenues.

But ITV believes that the contract rights renewal measure has already cost it £262m.

Advertisers however say the system has been justified, particularly given the combined power of hit ITV shows such as 'Coronation Street' and 'The X Factor.'

Mr Crozier told committee members he believed that the measure had led ITV to chase "higher-rating programmes," while Mr Norman said it led to "lowest common denominator" shows.

Data sourced from Financial Times; additional content by Warc staff