Ofcom finds compliance with CRR

by Tristan O'Carroll, Media Week 14-May-08, 12:48

LONDON - Agencies and advertisers raised only three complaints over ITV’s compliance with the contract rights renewal mechanism during the 12 months to end-April – the same level as the preceding 12 months.

According to the Office of the Adjudicator, the Ofcom-appointed body that handles disputes between agencies, advertisers, broadcasters and ITV over CRR, two disputes concerned ITV offering airtime on a fair and reasonable basis, while the other complaint concerned ITV’s enforcement and interpretation of airtimes sales contracts.

Regarding the two complaints over ITV offering airtime on a fair and reasonable basis, the Office found in favour of the complainants – without divulging any details of the complainants or specifics of the complaints. Regarding the complaint over ITV’s enforcement and interpretation of airtimes sales contracts, the Office found in favour of ITV.

Introduced to the advertising market in November 2003, CRR was put in place to stop the merger of Carlton and Granada giving ITV an unfair dominance of the television advertising market.

The mechanism prevents ITV from raising its prices to make up for falling audiences, pinning agency discounts to pre-merger agreements and preventing conditional selling across ITV1, as well as the broadcaster's digital channels.

According to agency estimates, ITV’s approximate revenue loss due to CRR totalled £100m in 2004, £108m in 2005 and £105m in 2006.