ITV welcomes review of advertising rules
The Commission said this morning that CRR would be retained because ITV1 is still able "to reach large numbers of viewers" and thus has a "strong bargaining position" with media buyers; however, it said that reform would be examined in light of "possible unintended effects".
Diana Guy, deputy chairman of the Competition Commission and the chairman of the CRR Review Group, explained: "ITV1 has seen a decline in its share of both viewers and advertising revenues since 2003 and there are now more alternatives for advertisers. However, ITV remains crucial for advertisers looking to reach large number of viewers,
particularly if this needs to be done rapidly.
"The media agencies, through whom the vast majority of TV advertising is bought, need access to ITV1 for their advertiser clients. As a result they cannot withdraw all their business from ITV1. However, we found that if they
try to reduce their proportion of expenditure on ITV1 they could be faced with significantly less attractive terms for their remaining ITV1 business. Because of this the changes in the market since 2003 have not increased the bargaining strength of agencies. It is therefore our view that a remedy needs to stay in place.
"However, we are considering whether some variations might be justified in light of the changed circumstances since 2003, and possible unintended effects of the CRR Undertakings in practice."
Guy cautioned, however, that the precise nature of any reform was "far from clear cut". So far, the Commission is proposing to include ITV1+1, which is pencilled in for an October launch, and ITV1 HD in the definition of CRR.
ITV executive chairman Michael Grade said: "We look forward to engaging with the Competition Commission over the next three weeks to identify which post-CRR option best serves the interests of ITV plc, its viewers and advertisers.
"We would like to put on record our appreciation of the time and effort the Competition Commission has put into this review to date and we look forward to the completion of the review in time for the upcoming deal season."
ITV shares opened lower in early trading on Tuesday.