Rates could rise on ITV

01 June 2009

LONDON: ITV, the UK's largest commercial broadcaster, should be subject to "less burdensome" restrictions on the rates it can charge advertisers, as new technology and changing audience behaviour have transformed the landscape in which it operates, according to the Office of Fair Trading.

The current regulations limiting the price of advertising on the company's flagship channel, ITV1, also known as contract rights renewal (CRR) undertakings, were implemented in 2003 following the merger of regional broadcasters Granada and Carlton.

However, while these limits were based on the need to counter the new entity's potentially dominant position in the broadcast market, the growing importance of digital TV is rendering the CRR mechanism increasingly redundant, the OFT says.

Similarly, the rise of "time shifted" viewing, such as through recording and playing back content via digital video recorders, and the growth of HDTV has also undermined ITV1's position.

As such, the OFT has asked the UK's Competition Commission to assess if it is "possible to find a more proportionate remedy, which creates less costs and distortions than CRR."

In common with the existing rules, such a formula will still need to "address any remaining detrimental effects of the merger arising from ITV1's unique position in the supply of mass audiences."

ITV said it "welcomed" the decision, and would also provide the Competition Commission with the requisite "legal, economic and market-based evidence to support the case for abolition."

Data sourced from Financial Times; additional content by WARC staff