Advertisers are resigned to ITV's Contract Rights Renewal system being relaxed but are lobbying hard to ensure changes are not introduced too quickly.
Advertisers are resigned to ITV's Contract Rights Renewal system being relaxed but are lobbying hard to ensure changes are not introduced too quickly.

CRR, which links ITV's advertising revenues to its audience share, was introduced in 2003 following the merger of Carlton and Granada.

The broadcaster has been lobbying the Office of Fair Trading (OFT) to relax CRR on the grounds that increased competition and fragmentation of the market mean it is out of date. It argues that the mechanism prevents it from taking risks with programming that could ultimately lead to bigger audiences.

ITV is keen to get the review through as soon as possible and is aiming for completion by autumn 2008, so it can implement any changes for the 2009 financial year. However, this timetable seems unlikely as Channel 4 and Five have both received assurances from the OFT that the review will not be completed until 2009, meaning ITV would not benefit from any relaxation until 2010.

Bob Wootton, director of media and advertising at advertising representative body ISBA, said: 'CRR has been a very effective intervention and gives the advertisers who fund commercial broadcasters a great deal of comfort.

'There are all sorts of possible changes in the air among UK broadcasters and EU legislation. All these components need to be taken into account when the OFT conducts the review and there is no argument for a hasty resolution.'

He added: 'The outcome is very much in ITV's court and we look forward to seeing what alternatives to CRR it proposes.'

The Media Planning Group head of broadcast Jim McDonald agreed that changes should not be implemented too quickly. He said a complete review of the way the broadcast industry trades was necessary, rather than just relaxing the existing regulations. In the meantime, he said, advertisers and other broadcasters would be lobbying against CRR relaxation going 'too far'.

Starcom group trading director Chris Locke believes relaxing CRR is wrong. He insisted the market would need more time to prepare if the current regulations are to be changed.

'It [relaxation of CRR] isn't acceptable, ITV will take 45% of TV advertising revenue this year - it needs to be controlled.'

He added: 'In my view 2010 would be the earliest possible date for the relaxation of CRR because ITV will have to honour advertisers' calendar and fiscal deals.'